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Budget will be tough, Gilmore warns householders


Eamon Gilmore

Eamon Gilmore

Eamon Gilmore

HARD-pressed householders have been warned not to expect any respite from the forthcoming Budget.

"This will be a tough Budget. I don't want anyone to be under any illusions about that," Labour leader Eamon Gilmore said yesterday.

Mr Gilmore said he hoped there would be "some scope for relief" but was unable to provide any further details.

His comments echoed those of Finance Minister Michael Noonan, who last week warned: "We are all on a programme and the next Budget is going to be tough''.

Speaking to the Sunday Independent, Public Expenditure Minister Brendan Howlin also said the Budget would not herald the end of austerity.

Responding to queries about relations between the Government and the Troika, Mr Howlin said: "Austerity is not a choice; austerity is learning to live within our means."

Last week Mr Gilmore rejected calls from the head of the eurozone rescue fund, Klaus Regling, and the Central Bank for the Government to stick to the Troika target of €3.1bn in new taxes and cuts.

Instead, he said: "If we find ourselves in a situation that it takes less than the €3.1bn to reach the 5.1 per cent of GDP target, that is what I believe we should do."

He also claimed that the dividend from the promissory note deal would provide some scope for flexibility in the Budget. Mr Gilmore's view that more initiatives must be taken on behalf of "hard-pressed families'' would be popular with Social Protection Minister Joan Burton, who will likely lead resistance to a full programme of cuts.

In an interview with the Sunday Independent, Ms Burton signalled her determination to resist further social welfare cuts and warned: "Most people now accept the importance of the social welfare spend in the domestic economy."

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She added: "Pensioners on fixed incomes are very conscious of the property tax, of how much it will cost in a full year; they have concerns about issues such as drug charges, so it is important we realise pensioners are paying their way."

Ms Burton also criticised the "endless emphasis on fiscal consolidation'' which, she said, had created a "deflationary cycle that is utterly destructive''.

Mr Gilmore's stance, and his alliance with Ms Burton, is likely to have been influenced by increasing unease about austerity within the ranks of his parliamentary party.

A Labour party committee, set up in the wake of the Meath East by-election defeat, recently concluded that €440m of cuts would not be "possible, wearable or do-able; it is not possible nor anything near or close to it''.

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