The economy is not in “meltdown” and it is “not the 1980s”, Tánaiste and Minister for Enterprise, Trade and Employment Mary Coughlan said this morning.
Ms Coughlan said the Government would take a “prudent” approach to “readjusting” the public finances and that final decisions would not be taken until next Tuesday afternoon. The Tánaiste also said a pay freeze in the public sector had not been ruled in or out.
Minister for Finance Brian Lenihan also said today the positives in the economy should not be talked down.
"Employment has increased as well so we're not in a position like the 1980s or previous years," he said.
"We're in a situation where employment growth is actually taking place in this economy. New jobs are being created. It is worthwhile to be employed and to employ and to work. We have a very good tax position here, it'svery attractive to work, there's good incentives to work. There are a lot of positives in the Irish economy and I don't think we should be talking them down," he added.
It emerged earlier this week that the Government will have to borrow three times more than it had planned and cut spending by €500 million this year because of a projected €3 billion shortfall in tax revenue.
"What we are doing is readjusting on the basis of the figures that were released on Wednesday," Ms Couglan said on RTÉ's Morning Irelandtoday.
“We will make our final decisions on Tuesday afternoon and we’ve been working on what our priorities are… One of our main priorities is our capital investment.”
Ms Coughlan added: “It’s important to say we’re not in a situation of meltdown. We’re not in a situation where the public finances are in serious threat. That is not where we’re at this is not the 1980s.
“We will still have a 30 per cent increase in output this year compared to 10 years ago so it’s important to say that, that we still have a huge budget available to us all of us a ministers in each of our departments and we will be making decisions that will be prudent.”
Asked about the news that expenses paid to public servants and members of the Oireachtas have been increased, Ms Coughlan said: “That is part of an ongoing thing and what has happened is within everybody’s pay conditions, pensions etc, who are civil servants, work in the public service, there have been agreements and decisions made.”
The increases were small, varying from 1 per cent to 4 per cent, but they have gone up on July 1st every year for the past decade, sometimes by significant amounts. The new subsistence regime for the public service, which came into operation on July 1st, under Department of Finance circular 14/2008, provides for an overnight rate of €145.32.
Ms Couglan said a pay freeze in the public service would be “an easy solution but it may not necessarily be the one that is made” during national pay talks.
“In times like this sometimes it is very easy to pick on those in the public service when in fact a lot of them are under serious pressure. That is not to say that we cannot do our job better, it is not to say can’t have more flexibilities.”
