Election battle lines are now firmly drawn
FINANCE Minister Brian Lenihan yesterday fired the first shots of the General Election campaign with the Government’s four-year super Budget.
But Fine Gael and Labour both warned they will not be tied down by the coalition’s recovery plan and they will have the power to change it when in power.
The €1 cut to the minimum wage appeared to be the only potential faultline emerging in the four-year plan last night.
But Fianna Fail backbenchers seemed to be waiting for the Budget in a fortnight to give a broader picture of the measures planned for those in lowpaid jobs and on the dole.
After the Green Party called for a general election in the New Year, the battle lines are already being drawn up for a campaign sometime in February or March.
Challenging the opposition parties to produce their own proposals, Mr Lenihan said the plan had enormously important political implications.
“This document has to be the basis of any sensible proposals for the next General Election. Anything else that’s put forward is nonsense,” he said.
The target of reducing the deficit to 3pc by 2014 must be met, but the means of meeting that target could be negotiated, he said.
“We have been talking to the European Commission. I want to make it perfectly clear that any incoming government is not bound by any individual policy decision in this document,” he said.
In the meantime, the Government has to pass next year’s Budget in a fortnight.
The coalition’s majority is expected to be narrowed to just two votes tomorrow when the result of the Donegal South- West by-election is declared.
Sinn Fein’s Pearse Doherty remains the favourite to win the by-election, taking a seat previously held by Fianna Fail.
The Government will be reliant upon the support of two Independents, Michael Lowry and Jackie Healy-Rae, along with rebel Fianna Fail backbenchers, to pass the Budget.
But Fine Gael left the door open to ensuring the crucial December 7th Budget is passed.
The €85bn bailout from the EU and IMF is contingent on getting the Budget passed.
Mr Kenny refused to definitively state if his party will vote against the draconian Budget, if it will support it, or if the party will abstain from voting.
He said simply insisted Fine Gael had always, and would always, “stand by the country”.
Mr Kenny’s stance comes after European Commissioner Olli Rehn warned of the necessity to get the Budget passed as soon as possible for the sake of economic stability.
Taoiseach Brian Cowen has already contacted both Fine Gael and Labour to stress the importance of passing the December 7 Budget in the national interest.
Fine Gael accepts a €6bn package of cuts and taxes is required in the Budget, but the party’s proposals will be different from the Government.
But the Labour Party insists just €4.5bn should be cut in this year’s Budget.
The party’s finance spokeswoman and deputy leader Joan Burton again claimed that cutting €6bn would stifle economic growth and make it very difficult for the country to meet its debts.
But Finance Minister Brian Lenihan claimed Labour needed to “face up” to the €6bn figure and “stop pretending” there was a simple cure-all solution. Justice Minister Dermot Ahern also waded in and accused Labour of showing its “total inability” to respond in a constructive way to the challenges faced by the country.
“It is time for the Labour Party to finally add something constructive to the debate, rather than just play to the gallery and offer lazy opposition . . . the Labour Party have once again failed to show leadership, failed to be constructive and failed to put the national interest ahead of narrow party political advantage,” he said.
The Labour Party reiterated the deficit must be reduced to 3pc by 2014.
But Ms Burton said her party didnot accept that €6bn of the proposed €15bn cutbacks should happen this year because of the negative effect such frontloading would have on the economy.
“It’s very hard to see €6bn being taken out of the economy in a very deflationary way producing the growth which is required,” she said.
“It has to be a mixture of growth, as well as cuts and reforms . . . there is no economy in the world that I know of that has deflated its way back to growth. That’s a difficult balancing act, but it’s something the Government has to try to achieve.”
If there is no growth in the economy next year, meeting debt levels for bailing out the banks will prove very difficult, Ms Burton said.
Fine Gael communications spokesman Leo Varadkar said he was opposed to the idea of reducing the minimum wage, particularly when there were no plans to reduce the salaries of some of the country’s highest earners in the public service.
The minister claimed Fine Gael’s attacks were based only on “party political considerations”.
Taoiseach Brian Cowen is widely expected not to lead Fianna Fail into the General Election.
Rebel Fianna Fail TD Sean Power yesterday told his local radio station Mr Cowen would step down after the Budget. But Mr Cowen said he had “given no such indication to anybody, including Deputy Power”.
Mr Cowen also said he would deal with criticism of his management of the economy as Taoiseach and Finance Minister “during an election campaign” and said it was his intention to lead the party into the election.