Nothing is safe as sweeping cuts loom
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Monday January 12 2009
A ROLLING programme of cutbacks across government departments will get under way within weeks in a bid to save hundreds of millions of euro.
And the head of the special taskforce set up to find the savings warned last night: "We will go through absolutely everything."
The group, dubbed An Bord Snip Nua, was originally tasked with identifying savings for Budget 2010.
But the crisis in the public finances has become so acute that it now expects to make its first interim report as early as next month.
The Irish Independent has learned that the group will make a series of rolling reports to Finance Minister Brian Lenihan this year, so that he can make immediate cuts.
The move follows revelations that the Government needs to save an extra €2bn by slashing public sector pay and jobs. The new savings will be on top of this €2bn, which itself is in addition to cutbacks and tax increases announced in last October's Budget.
There will be no areas off limits for the taskforce, whose full title is the Special Group on Public-Service Numbers and Expenditure Programmes (SGP-SNEP) .
Its chairman Colm McCarthy revealed yesterday: "There will probably be a continuous reporting process (from An Bord Snip to Government). There won't be one big blockbuster report."
One of the first areas to be looked at is the contentious issue of generous expenses for TDs and Senators.
A source said: "There is a widely-held feeling that it wouldn't be credible to institute... deep cuts across the board if you didn't look at what those in power are getting."
Sources said Mr Lenihan is also looking at potential tax increases again, as he tries to address the gaping hole in the country's finances.
Labour leader Eamon Gilmore yesterday called for an early general election as he questioned Taoiseach Brian Cowen's mandate to lead the country out of the downturn.
There are concerns about leadership issues within the Government, compounded by Mr Cowen being away in Japan this week and the Dail remaining on Christmas holiday for another fortnight.
Mr Gilmore insisted the public mood now demanded a change in political leadership, as Ireland slides further into a recession worse than that of the 1980s. Mr Gilmore claimed Fianna Fail would be ejected and his own party could lead a new Cabinet if the country went to the polls.
Recovery
He said: "The start of our recovery as a country, and the start of our recovery as an economy, begins with getting this Government out of office.
The Labour leader made his call after a weekend where furious unions warned of fierce resistance if the Government sought unilateral pay cuts.
Speculation is mounting over a difference of opinion between the Taoiseach and Mr Lenihan in relation to the looming economic challenges, with an extra €2bn to be cut in public spending in areas to be determined over the coming weeks.
Separately the Irish Independent understands that An Bord Snip will begin meetings with individual government departments from the end of this month. The process will be similar to the annual estimates process, but more detailed.
Social Affairs Minister Mary Hanafin has already said she fears An Bord Snip could target entitlement to lone parent allowance and the carer's payment, even though the group has yet to study this area.
The Government says its budgetary strategy is designed to restore stability to the public finances over five years to 2013.
The general government deficit was 6.25pc of GDP at the end of 2008 and is heading for a minimum deficit of 9.5pc of GDP this year.
Government tax revenues fell by 13.7pc last year, while massively-expanding social welfare spending is now said to be a "significant" pressure on the expenditure side.
- Senan Molony Deputy Political Editor
