'Serious mistakes' were made, but a defiant Lenihan feels no FF shame
Published 08/12/2010 | 05:00
FINANCE Minister Brian Lenihan last night refused to say he felt "shame" on behalf of his Fianna Fail party for having to bring in a draconian Budget.
He accepted "serious mistakes" were made by the Government prior to his appointment as Finance Minister in May 2008.
But he said the opposition parties had wanted even higher spending and denied that he should feel shame on behalf of his party for its mishandling of the economy over the past 10 years.
"That's a very pejorative question. I'm very proud of the work I have done. I faced an extraordinary financial crisis in this country. No finance minister since the foundation of the state has had an equivalent crisis," he said.
At a news conference in Government Buildings last night, Mr Lenihan hailed the fact that the first Budget vote had been passed by 82 votes to 78 -- and he had not even voted himself because he was dealing with media queries.
He defended the decision not to impose a salary cut to TDs, saying they would now be subjected to a special 4pc PRSI contribution after previously having paid a zero rate.
He said the €14,000 reduction taken by Taoiseach Brian Cowen was "certainly the largest in the public service".
And he confirmed Dublin-based ministers might have to pool their state cars "subject to security considerations".
Mr Lenihan defended the changes made to the income tax system -- as it emerged that a single person on €25,000 would suffer a 4.6pc cut in earnings, while a person on €175,000 would suffer a 3.9pc cut in earnings.
He said various changes would hit higher earners, such as the reduction of tax reliefs, pension reliefs and the abolition of the PRSI ceiling on salaries of over €75,000.
"The easy option would be to increase the rate of taxation. There is no question that those who have the most assets will pay their fair share in this Budget," he said.
Mr Lenihan admitted there would be a €1.8bn cutback to spending on capital projects -- €800m higher than the figure quoted in its recent capital investment plan.
But he also added that there was sufficient funding for the Metro North project, even if private funding did not materialise.
And he said there was no provision in the Budget for selling off Bord Gais -- the €300m figure mentioned referred to property disposals.
"That's entirely incorrect and fallacious. Again, that's just a scare tactic," he said.
Mr Lenihan said that the changes made had ensured that Ireland would be in "single digit land" in terms of its 2011 Budget deficit -- although the 9.2pc deficit does not include the cost of the banking bailout.
Although there are no direct references to abolishing state agencies in the Budget, Mr Lenihan said there was a "clear financial incentive" for departments hit by funding cutbacks to eliminate as many of them as possible.