Friday 9 December 2016

Cowen leaves door open for an earlier Budget date

Fionnan Sheahan and Emmet Oliver

Published 29/10/2010 | 05:00

TAOISEACH Brian Cowen last night fuelled speculation the Government will bring forward the date of the Budget.

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There are concerns within the Coalition that the time between the announcement of the four-year budgetary plan in November and the actual Budget 2011 on December 7 will prompt intense lobbying of ministers and backbench TDs to get decisions reversed.

A coalition source described the gap as "three weeks to get beaten up".

The speculation came as borrowing costs for Ireland went above 7pc, prompting the European Central Bank (ECB) to plunge into the market and buy the bonds to stabilise the situation.

The interest rate later dropped back after the ECB's intervention.

Despite announcing plans for a €15bn budget adjustment, the bond markets remain unconvinced for now, with some buyers avoiding all of the so-called 'peripheral' countries.

Some bond traders believe the four-year plan may be too difficult to implement, while others are worried it could choke off growth.

The level of detail expected in the proposal to reduce the deficit to 3pc by 2014 should give clear indications of the contents of the Budget.

Targets for next year on tax increases and spending cuts in each department will signal what is to come three weeks later in the Budget.

The growing sense that the four-year super budget plan will be highly detailed means key decisions will be taken by the middle of November, rather than the closing days of budget preparation in early December.

Coalition sources say there is "a logic" to closing the gap -- by moving the four-year plan back by a week and bringing the Budget forward.

Pressure

"It's the fact that a lot of the measures will be out there. It's something that might change quite quickly if they feel it needs to," a source said.

But the Department of Finance will not be keen on changing the dates, as bringing the Budget forward will pile more pressure on its staff.

However, Finance Minister Brian Lenihan and his officials did make changes last year to the ratification of budgetary measures to ensure no rowbacks would be possible.

The cuts to social welfare benefits were voted on before Government TDs headed home for the weekend after the Budget was announced.

Passing the social welfare cuts also ensured there could be no U-turn on the reductions in public sector pay.

"It's going to be very hard to keep a lid on things," another source said.

Mr Cowen didn't appear to rule out the possibility of closing the gap between the two dates -- but he didn't say it would happen either.

"Well, we are working away, I mean, as you know, in relation to both matters.

"And we have set various target dates to try and communicate what the timing is, so we're working away to those schedules and if there are any changes we'll let you know," he said.

The Taoiseach, however, ruled out extending the four-year timescale for reducing the deficit to six years, as called for by the trade union movement and a leading economic thinktank.

"There is no question of extending it," he said.

Mr Cowen also gave a less-than-enthusiastic response to Environment Minister John Gormley's call for further cuts to the salaries of TDs and senators.

"The question of TDs pay has been tied in with the civil service grades. So it's tied in there and there has been a reduction, quite properly, in TDs' salaries and changes in how expenses are claimed," he said.

Irish Independent

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