Some €5.3 billion of spending cuts, including a reduction in social welfare rates and thousands of job losses in schools and hospitals, have been recommended by the group appointed by the Government to review public spending.
The report of the Special Group on Public Service Numbers and Expenditure Programmes, chaired by Colm McCarthy, is filled with politically difficult choices, including significant reform of the public services, the closure of half of all Garda stations, and sharp reductions in some payments to farmers.
The half-rate carers’ allowance, the half-rate illness benefit and the half-rate jobseekers’ benefit should all be cut, along with the half-pay offered to those already on social welfare working on community employment schemes, the report says.
More than 17,000 State jobs could be eliminated using the existing recruitment embargo, routine retirements and the current voluntary redundancy scheme without “any compulsory redundancies”, it says.
Over €1.2 billion must be cut from the Health Service Executive’s budget next year alone, which will prove to be “a huge challenge”, Minister for Health and Children Mary Harney has acknowledged.
Mr McCarthy said Ireland was borrowing €400 million a week, and paying a penalty interest rate to intra-national lenders.
Because of falling prices and pay cuts, there is a “clear case” for a 5 per cent cut in social welfare rates which would save €850 million a year, the group said. A flat-rate €30 cut in child benefit payments should be imposed, saving more than €500 million. The Government should not bow to pressure to reintroduce the Christmas social welfare bonus which is “no longer affordable”.
People attending AE without a GP certificate should pay €125 a visit. Medical card holders should pay €5 per prescription, while those on the Drug Payment Scheme should pay €125 a month for medicines.
The expert group said 6,000 jobs should go in the HSE over time, including 500 managers. Staff should be available to work between 8am and 8pm on a seven-day roster without earning any extra allowances. Overtime rates should also be reviewed while existing curbs on open recruitment should end.
Thousands of teaching jobs should go, the report says, including 1,000 English language teachers and 2,000 special needs teachers. Smaller rural schools should be closed and school-bus transport fees, now €138 a year per pupil, should rise to €500, and even further in time because the services are heavily loss-making.
The number of special needs assistants in schools means that “there is now scope” to cut 2,000, and bring numbers back to 8,500. The report also suggests that €3 million a year could be saved by discontinuing the National University of Ireland.
The number of embassies and consulates should be cut from 76 to 55, while future ambassadors in all bar the biggest posts should be paid at principal officer, rather than assistant secretary rank.
The Department of Community, Rural and Gaeltacht Affairs should be abolished and its duties transferred to other departments, while the Department of Arts, Sport and Tourism’s budget should be cut.
Enterprise Ireland should absorb all of the Community Enterprise Boards, and the job-creation role of Udarás na Gaeltachta.
Minister for Finance Brian Lenihan called for considered debate of the specific policy options set out in the report. “The special group presents some difficult policy options. These are the choices that we as a people, and not just as public representatives and Government, will have to face up to in order to get this nation back on track,” Mr Lenihan said.
Fine Gael deputy leader Richard Bruton said the report begins “at last” the re-engineering of public services Fine Gael has wanted for years, but he and Labour Party leader Eamon Gilmore expressed reservations about social welfare cuts.
The report was condemned by Siptu president Jack O’Connor, who said it was “an exercise in fantasy”. Impact trade union leader Peter McLoone threatened “sustained, widespread and painful industrial action including strikes” if the Government cuts pay, reduces pensions or tries to enforce compulsory redundancies.
