Party criticised for its 'total inability to be constructive'
THE Labour Party came in for stinging criticisms last night after it insisted just €4.5bn should be cut in this year's draconian Budget.
Finance spokeswoman Joan Burton claimed cutting €6bn would stifle 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 a 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," Mr Ahern said.
Fine Gael has supported the Government's €6bn target, but Labour has insisted on a lower figure of €4.5bn.
The €6bn target has been agreed at European level. If it is not reached, the daily costs of running the country cannot be met, Mr Lenihan said.
The Labour Party last night reiterated the deficit must be reduced to 3pc by 2014.
But Ms Burton said her party does not 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."
Ms Burton insisted her party would seek to renegotiate elements of the four-year plan, such as cuts to the minimum wage, if the party gets into Government.
She welcomed the elimination of tax expenditures at a saving of some €1.5bn, alongside reductions in pension tax reliefs.
But she claimed the plan provides for a "hard landing" for PAYE workers and a "soft landing" for the "friends of Fianna Fail".
"The four-year plan presents the Irish people with the bill for 13 years of Fianna Fail government. Over 140 pages, it outlines the price of economic failure," Ms Burton added.
The plan gives no indication that those who have the most will contribute the most because there is no higher tax rate for higher earners, no cap on high-level public sector pensions, and no cap on public sector pay.
Labour enterprise spokes- man Willie Penrose claimed that cutting the minimum wage by €1 per hour made "absolutely no sense".
He said such a cut would only act as a disincentive to work.
"Just 47,000 people, or 3pc of the workforce, are earning the minimum wage, so to argue that cutting it will add significantly to our competitiveness, simply does not stand up."