Kenny set for clash with Gilmore over €3.1bn Budget cuts
Published 29/07/2013 | 05:00
TAOISEACH Enda Kenny has set himself on a collision course with Tanaiste Eamon Gilmore by indicating there will be no let-up in the austerity planned for the October Budget.
Mr Kenny says he wants to "finish the job" of cuts and taxes needed and claimed easing off now risks "jeopardising everything we have all worked for".
The Taoiseach was addressing the MacGill Summer School in Glenties, Co Donegal, after Mr Gilmore suggested the next Budget might not include the full €3.1bn of cuts and taxes that had been planned.
Labour is arguing the €1bn benefits of the promissory note deal can be used to ease up on austerity – and claims the full €3.1bn isn't needed to reach our deficit targets.
However, others such as the Central Bank and the Fiscal Advisory Council, the Government's independent economic advisers, have warned against this, and Mr Kenny has now placed himself at odds with Mr Gilmore.
In the script of his speech, Mr Kenny said a "failure to follow through on all the hard work and sacrifices of the Irish people now, so close to the bailout exit, jeopardises everything we have all worked for".
While his delivered comments were slightly different, his script added that "any short-term relief from backing off from our deficit-reduction plans would be far outweighed by the impact on jobs and growth, and on interest rates, caused by the loss of confidence and capital flight that would arise should Ireland stray from the path agreed".
Mr Kenny said the "people of Ireland would not forgive us for faltering at the last fence".
He added: "About 90pc of the fiscal consolidation is complete, I want to finish the job, and finish it as quickly as possible."
And he said any flexibility the Government had in the Budget should be used for investment and job creation rather than easing up on cuts.
But he added the Coalition must fix the public finances. "The public have entrusted us with the national finances and expect us to do our duty, no matter how difficult it may be," Mr Kenny said.
However, in later comments, he said the Budget was still being negotiated and the final figures would not be available to Finance Minister Michael Noonan until the "back end of September".
"It's important to say that what we're talking about here is a matter for negotiation and that negotiation will be based on information and on facts.
"There has been no discussion about this detail as yet at cabinet level nor indeed between Cabinet and troika. We do intend to meet our targets."
The Fiscal Advisory Council says there are too many "uncertainties" in the economy to back away from the €3.1bn.
The troika and the new EU bailout fund, the ESM, both maintain the Coalition should not revise its plan.
Ministers claim the targets of reducing the country's deficit can still be met, even with less cuts and taxes next year, and the Government will not be breaking any agreements.
The Fiscal Advisory Council says this strategy is "risky" and council chairman Professor John McHale said the Government should maintain a €3.1bn adjustment in the Budget.
"The money adjustment targets are directly relevant in that much of Ireland's credibility in terms of showing it has the political capacity to make the necessary fiscal adjustments really revolve around meeting those targets," he said on RTE's 'This Week'.