Taxpayers could be facing a heavier burden after Minister for Finance Brian Lenihan signalled today the Government may seek even deeper cuts in the forthcoming Budget than the previously-flagged €3 billion.
Speaking as he arrived for the start of the two-day Fianna Fáil parliamentary party meeting in Galway, the Minister said the figure of €3 billion in cuts was only indicative and was a "minimum" that would have to be achieved to help address the State's struggling finances.
He said there was clearly "scope" for deeper cuts but no decision had yet been taken.
"The figure of €3 billion is a minimum, but clearly Government will have to go through the different departments," Mr Lenihan told reporters. "We have to look at what can be saved and what the correct position is."
Mr Lenihan announced €4 billion in spending cuts in his Budget last December.
Addressing delegates this morning, Taoiseach Brian Cowen said it was ''imperative" the Government imposes €3 billion in spending cuts in the Budget on December 7th if the State is to remain on track to cut its fiscal deficit to 3 per cent of Gross Domestic Product.
Referring to the widening debt burden, Mr Cowen said the State was borrowing from abroad to "fund spending on essential public services such as hospitals and schools, as well as on social protection for the pensioners and the unemployed".
The Government will publish a new trade, tourism and investment strategy before the end of the month, he said, adding that the focus for was on “competitiveness and productivity”.
Mr Cowen referenced the 2010 Global Competitiveness Report – published last week – and noted that it ranked Ireland's higher education 4th highest. He did not mention in his speech that the same report noted Ireland's overall global competitiveness has fallen four places to 29th last year while the State has also achieved the dubious distinction of the worst banking system of among the 139 countries surveyed by the World Economic Forum.
The Taoiseach said it is “useful to reflect on why unemployment has risen so fast given that many of the fundamental strengths of the Irish economy remain in place”.
Mr Cowen’s speech was followed by a session on job creation chaired by Minister for Enterprise and Employment Batt O’Keeffe.
Mr O’Keeffe said job creation was at the heart of the Government’s economic strategy despite “criticism from others” and “widespread unpopularity.”
He said there was “clear evidence” that coordinated measures taken by Government to address competitiveness, the public finances and the banking system were paying off.
“Today, we have put in place a €500 million innovation fund and new seed and venture funds to support Irish and International entrepreneurs based here and we are providing the funds to see the number of firms in Ireland undertaking significant research and development increase by 30 per cent,” he said
Mr O’Keeffe said that job creation would have to be driven by the enterprise sector. “That is why the Government is focusing on a ‘whole of enterprise’ strategy - the best route for Ireland to deliver the sustainable economic growth we need over the coming years,” he said.
He also derided the Opposition’s strategies for job creation. “Fine Gael cannot even agree on the number of jobs its NewERA policy might create. And the Labour Party’s policies, to paraphrase Winston Churchill when speaking of Communist Russia, are ‘a riddle, wrapped in a mystery, inside an enigma,'” he said.
Speaking in Brussels today after a meeting of the European People's Party, Fine Gael leader Enda Kenny said Mr Cowen had been "the worst minister for finance in the history of the State".
He said the Taoiseach was "the last person that we can trust when is comes to economic matters" because he represented "a failed past".
The today's meeting was being addressed by a number of Government Ministers and outside experts, including Government adviser Prof Peter Clinch, Jim O’Hara, vice-president of Intel Corporation, and Pat Fitzgerald, founder and director of Abtran.
Tomorrow, a session on banking credit chaired by Minister for Finance Brian Lenihan will be addressed by Nama chairman Frank Daly; John Trethowan of the Credit Review Office, and Cliff Taylor, editor of the Sunday Business Post.
The Taoiseach will deliver the closing remarks at the end of the meeting at lunchtime tomorrow.