Friday 22 September 2017

Burton fires shot across FG bow over welfare cuts

Michael Brennan and Fiach Kelly

SOCIAL Protection Minister Joan Burton has put herself on a collision course with Fine Gael by warning that even implementing half of the proposed social welfare cuts would cause serious difficulties.

Fine Gael is warning that a €300m softening of the planned €3.1bn in cuts and taxes in next month's Budget is the "outer limit" of what it is willing to concede to Labour.

In her briefing to Labour TDs at their party think-in, Ms Burton warned about the impact of implementing the full €440m social welfare cuts target, saying that cutting even half that amount would be serious.

But Fine Gael is determined not to allow Ms Burton to achieve a substantial reduction in the social welfare cuts.

And senior Fine Gael sources say new growth figures to be revealed tomorrow are unlikely to allow much deviation from the overall €3.1bn target.

"There will be little scope to bring it down," one source said. "It looks unlikely that there'll be much leeway at all."

Ms Burton herself publicly warned about the dangers to the economy of cutting social welfare. "The Budget adjustment should be one that actually keeps the trajectory of employment growth going, does nothing to harm our recovery and actually assists that recovery, while at the same time maintaining our core standards in relation to social welfare," she said.

A source close to Ms Burton insisted she was not scaremongering about social welfare cuts, saying she had given a very positive presentation to Labour TDs about the 33,000 new jobs created and the fact that every 10,000 fewer people on the Live Register would save €97m in welfare payments.

However, Fine Gael is unhappy with the pace of welfare reform under Ms Burton, and is keeping the pressure on the Labour deputy leader.

Labour TDs were also briefed by Public Expenditure Minister Brendan Howlin about the overall budgetary situation.

Sources said he did not put a specific figure on how much the party wants to reduce the €3.1bn target, but he did insist that the €1bn savings from the promissory note deal would be brought into play.

SURPLUS

Finance Minister Michael Noonan says his main target is to achieve a primary budget surplus, meaning taxes taken in exceed the level of money spent running the State, but it would take more than €2.5bn to achieve.

Labour will insist that the breakdown between tax revenue and spending cuts in the Budget is close to the approximate 50:50 ratio in the last two Budgets.

However, Fine Gael wants any extra cash focused on funding capital projects, and then cutting some slack in the Department of Education.

Sources say cuts in education, such as increasing the pupil-teacher ratio, are politically more damaging than those in the Department of Social Protection.

Education Minister Ruairi Quinn did not mention the pupil-teacher ratio or any other specific cuts when briefing Labour TDs.

Irish Independent

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