The Minister for Finance, Mr McCreevy, is to warn Fianna Fáil backbenchers that the current spate of public spending cutbacks is to be followed by even more stringent fiscal measures next year.
In a presentation to a special two-day meeting of the Fianna Fáil Parliamentary Party in Killarney tomorrow, Mr McCreevy will tell TDs and Senators the public purse strings will be pulled even tighter in 2003 to let him keep spending increases to 9 per cent. So far this year spending is 18.9 per cent ahead of 2001. So next year's target represents a sharp slowing down in spending.
The Taoiseach, Mr Ahern, will also address backbenchers in an effort to defuse their growing concerns over cutbacks and the decision not to fund the "Bertie Bowl" from public money.
A Department of Finance source said last night that Mr McCreevy will be sending a very strong message about a strict pruning of public finances.
"He will be giving it straight to TD's that the situation will be very tight indeed. The recent cutbacks will be nothing compared to what will be expected next year."
Ministers will be told that their spending demands for next year will be closely scrutinised and not to expect to have all their requirements met.
Major battles are expected between now and the Budget between Ministers and Mr McCreevy as he seeks cuts across all Departments. A three-man committee of "wise men" headed by former governor of the Central Bank Mr Maurice O'Connell is currently examining Ministers' spending proposals, and is expected to report in two weeks.
While Mr McCreevy is determined not to increase tax rates in the forthcoming Budget, the Government's Tax Strategy Committee will be asked to look at other options to increase the take, including the possibility of freezing tax bands. That would yield between €500 million and €700 million.
The Department of Finance said last night that they would not be commenting on the Tax Strategy Committee's work at this stage. There was speculation yesterday that the committee is to look at taxation of child benefit.
Meanwhile, the Taoiseach's authority is seen to have been undermined after it emerged that Mr McCreevy changed his mind and supported the Tánaiste, Ms Harney, on the Abbottstown project before last week's Cabinet meeting.
Some TDs are furious that they have not been kept informed of developments by the Government and had to learn of spending cuts in the media. There is particular anger over cuts in health and education and the Ministers concerned, Mr Martin and Mr Dempsey, have also been asked to brief backbenchers on the effects of the savings.
Some backbenchers feel the Taoiseach handled the "Bertie Bowl" issue very badly and are annoyed that the PDs have been seen to have forced his hand on the issue. But Mr Ahern will tell the parliamentary party that they must "put up or shut up", and he will stress the importance of the party moving forward together during these current difficult economic times. "He will be appealing for a united front." a Government source said.
The Government chief whip, Ms Mary Hanafin, told The Irish Times last night that there was a strong feeling among TDs that they had not been kept up to speed, and that they had to bat for the Government on radio and in local newspapers without having been properly briefed.
"It is accepted that the communication lines could have been more open but it was the summer period and many people were away," she said.
Ms Hanafin said the Fianna Fáil Parliamentary Party includes 21 new TDs and 10 new Senators and the gathering in Killarney was an opportunity to brief them. The main focus of the two-day session will be the Nice Treaty.