Budget cuts designed to safeguard jobs: Kenny
Published 21/11/2011 | 17:16
TAOISEACH Enda Kenny has insisted that any cuts in the looming Budget will be imposed to safeguard jobs.
Despite widespread speculation of a €10 euro a month drop in child benefit and eight euro in the dole, Mr Kenny claimed the Government has not signed off on the details ahead of December 6.
But he warned that difficult cuts will be imposed to avoid having to hike taxes and ensure the Government can fulfil its main objective of protecting jobs.
"No decisions have been made about any of those range of matters that are being talked about because the Cabinet have not signed off on the Budget yet," he said.
"The mandate given to the Government was to sort out the difficulties with our public finances and have a governance system that looks after those who are vulnerable, and at the same time allows for us to concentrate on what is fundamental here - and that's getting people back to work.
"So, if we don't make the cuts that have been agreed on, that's to get down 3.8 billion euro this year, then the only alternative is to increase taxes and increasing taxes affects jobs directly."
The Taoiseach said that with more than 440,000 people on the live register, increasing taxes and adversely affecting jobs would be unsatisfactory.
Social Protection Minister Joan Burton has been openly opposed to potential cuts in welfare.
She has campaigned for Finance Minister Michael Noonan to make cuts elsewhere, such as employers paying for sick pay, but has said Labour must honour its pre-election promise to leave basic welfare rates and child benefits as they are.
"I've made suggestions to my colleagues and we are having extremely detailed discussions on an ongoing basis in relation to every item in the Budget," she said.
Fianna Fail spokesman on Social Protection Barry Cowen said Labour needs to make its stance clear on child benefits, having made pre-election promises to exempt them. He said it would be "shameful" of Labour if the speculation on cuts is true.
"If the reports are accurate, this news represents the utter capitulation of the Labour Party on what it described as its 'red line issue'," he said.
Mr Noonan announced at the start of the month that the Government needed to make savings of 3.8 billion euro in the Budget to ensure the country reaches its EU-IMF targets to reduce its deficit.
He outlined plans to make savings of 1.6 billion euro by hiking VAT, excise duties and carbon taxes, and 2.2 billion euro in public spending cuts.
Meanwhile, Sinn Fein spokesman on Jobs, Enterprise and Innovation Peadar Toibin TD accused the Government of making wrong choices and condemned its plans to increase VAT to 23%.
"In 2009, Brian Lenihan admitted that the VAT increases he introduced were completely counterproductive and resulted in a loss of revenue to business," Mr Toibin said.
"Two years deeper into an economic downturn, this Government again is considering an increase in VAT, which will result in job losses and higher cost to consumers."
Mr Toibin added that he has been pressing Jobs Minister Richard Bruton to sit down with the Northern Ireland Executive to equalise tax and excise rates across the whole island.
"The Government has choices to make, it does not have to continue to bail out banks," he said. "It does not have to introduce a budget that will attack those in poverty and it should not pursue policies that undermine our economy.
"The Government proposals are bad for our people, bad for our small retailers and bad for jobs."