THE GOVERNMENT has confirmed agreement with the Opposition parties on the holding of a pre-budget debate next Tuesday.
Government Chief Whip Pat Carey said last night that a meeting of party whips had agreed that the debate will be held. “The debate which we have agreed this evening will allow for Ministers, Opposition spokespeople and deputies to share their views on what decisions should be made in the upcoming budget. I would hope that this will be a measured, mature, and above all, realistic discussion on the economic options open to the Government,” he said.
Mr Carey said the Government was open to hearing how the Opposition parties suggest a €4 billion reduction in public expenditure should be achieved.
The debate will be based on details from the Pre-Budget Outlook to be published today. Sources said yesterday that it may contain one variation on the key economic figures which were unofficially confirmed this week.
A memo presented to the Cabinet meeting on Tuesday predicted a contraction of the economy of 7.5 per cent this year and of 1.5 per cent in 2010. This compares with the April forecast of a contraction of almost 3 per cent next year.
If the Government goes ahead with cutting expenditure by €4 billion, the forecast is for an overall budgetary deficit of 12 per cent of GDP next year, compared with 14.5 per cent without adjustments.
The outlook will be published following a Cabinet meeting focused on the budget. The document sets the economic context for the budget and is expected to be a technical document without specific detail about estimated spending for next year.
Yesterday, Taoiseach Brian Cowen confirmed that the decision taken in last April’s budget not to pay the Christmas bonus to social welfare recipients would stand and would not be varied.
He was accused of making a “mean reply” by Labour leader Eamon Gilmore. Speaking in the Dáil during Leaders’ Questions, Mr Cowen said the savings achieved would be €223 million in 2009 and an estimated €245 million in 2010 (the rise accounted for by increases in unemployment).
“The Christmas bonus payment was made against a background, in other administrations, when increases in social welfare payments were very small. When resources were available to the Government, social welfare and pension rates improved significantly . . . We are now in a different situation and we must deal with the gap between spending and revenue,” he said.
Mr Gilmore responded that the suspension of the bonus for pensioners for the first time in 30 years was “a measure of the mess Fianna Fáil has made of our economy”.
Fine Gael leader Enda Kenny asked Mr Cowen to outline the details of his plans to cut child benefit from certain groups. Mr Kenny has said his party is opposed to any change to universal provision.
He accused Mr Cowen of having a “secret plan” to cut child benefit in the budget. The Taoiseach replied that he would not reveal any details of budgetary proposals.