Lenihan faces tax hikes, more cutbacks to raise €4bn
THE Government will have to cut spending and raise taxes to a combined total of nearly €4bn in the Budget next Tuesday -- or almost €1,000 for every man, woman and child in the country.
Official figures released last night show that Finance Minister Brian Lenihan faces a yawning gap of almost €15bn when he gets to his feet to present his Budget for next year.
A further blow to the Government's dwindling finances came as new figures revealed hard-pressed consumers are deserting shops at unprecedented levels.
Retail sales plummeted by 6pc in August, the sharpest recorded drop in 24 years. Not since February 1984 have retailers seen such a disastrous month as cash-strapped shoppers kept a tight grip on their finances.
Some economists said the Government may have to increase its estimate for next year's deficit as the retail sales confirm that the economy is still shrinking. But that would come after the early Budget is launched.
Last night's Budget White Paper showed the Government expects its finances to be off kilter by €11.5bn at the end of this year, according to the details of total receipts and expenditure, representing the best guess for the final 2008 outturn.
This leaves a whopping 5.5pc deficit in terms of GDP for the general Government finances.