Business News

Thursday 18 September 2014

'It's not easy' to provide and cut €2bn

Published 06/12/2012 | 05:00

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PUBLIC Expenditure Minister Brendan Howlin has admitted it is "not easy" to keep providing public services while imposing over €2bn in spending cuts.

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He announced a range of cutbacks, including a €10 reduction in child benefit and reductions in the telephone and electricity allowance for elderly people.

Mr Howlin said the country would come through the "tough" crisis which was almost without precedent in the developed world.

"In time, future generations will be proud that we, as a people, tackled this crisis head on," he said.

Public Sector

Mr Howlin stood over the Croke Park Agreement, which protects pay and positions for public servants. He insisted he would be looking for €1bn in extra savings in the extended agreement over the next two years. And he said there would be a €150m rise in the spending budgets for health and social protection respectively.

"We are not going to slash and burn essential public services to satisfy particular interests, or in response to sensationalist headlines," he said.

Social welfare

There was good news for government backbenchers with confirmation that the commitment not to cut basic social welfare rates had been maintained. But the bad news was a €10 child benefit cut and a cut in the length of payment for the €188 jobseekers' benefit from 12 to nine months.

Health

Mr Howlin announced a tripling in the prescription drug charge for medical card holders from 50 cent to €1.50 per item.

Taxpayers will only be able to claim refunds on drugs bills of over €144 per month, instead of the previous limit of €132. And Mr Howlin said that professional fees for pharmacists and GPs would be cut again by €70m.

Education

Student contribution fees would be hiked by a further €250 to €2,500 and the pupil-teacher ratio for fee-paying schools would be increased.

Jobs

Mr Howlin announced a €175m venture capital fund for new Irish companies.

He also said that 10,000 extra training and work placement posts would be provided for people out of work at a cost of €26m.

Politicians' pay

The controversial severance payments for ministers who lost their jobs has been abolished – a politically clever move.

Mr Howlin also got a cheer from government backbenchers when he declared that Independent TDs would have to vouch for how they spent their €41,000 leader's allowance. This allowance, and the allowance being paid to party leaders, is also being cut by 10pc.

Irish Independent Supplement

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