The great retreat
BRIAN Cowen's first budget since becoming Taoiseach was in shreds last night after an embarrassing double collapse on two key planks of the Government's economic plans.
Budget 2009 was ripped apart by the embarrassing climbdown on the medical cards for the over-70s and the exemption of minimum-wage workers from the 1pc income levy.
The Government is now also facing a new raft of protests over crippling education cuts. Elderly groups also plan to stage further protests outside the Dail today, despite the changes to the medical card scheme announced yesterday.
As the Taoiseach flew out to China last night, he left behind a weakened coalition and huge cracks within his own party, less than six months after taking over as leader.
Fighting back the tears, Health Minister Mary Harney earlier finally apologised for the upset and confusion caused by the medical card fiasco.
"I deeply regret the fact, yes, I am sorry that that would happen. Of course I am," she told RTE news.
Although she does not plan to resign over the controversy, Ms Harney failed to give direct answers on when she will move on from her post or if she will run in the next general election.
Finance Minister Brian Lenihan now has to re-draft parts of the Budget following the row-back and find where the Government will now attempt to make savings.
He must replace the €60m required to keep the low-income workers out of the income levy, while it is still not clear if Ms Harney will raise the €100m savings required to fill the gap in her budget.
Under the changes announced yesterday, up to 20,000 of the 350,000 over-70s who currently have a full medical card are expected to lose the benefit from January, despite the changes in eligibility.
These 20,000 -- who are among a group of 140,000 over-70s who got the card regardless of means -- will fall outside the new cut-off eligibility point.
Pensioners over 70 will have to effectively "rat" on themselves if they are earning too much to be entitled to a card. Those currently eligible will not have to undergo a means test, but will have to volunteer to return their cards if their income is over the threshold.
Everyone else will simply keep their medical card.
Announcing the latest u-turn on eligibility, Ms Harney said it will now be based on gross income -- €700 a week for single person and €1,400 for a married couple.
Despite the second climbdown on eligibility levels in the space of a week, the minister insisted the €100m savings targeted by the abolition of automatic entitlement would still be achieved.
The Government will now ask GPs who received €640 a year in capitation fees for each non-means-tested card holder to reduce this sum.
Meanwhile, following the education cuts, unions and managers have predicted chaos and "logistical nightmares" in schools from January.
The National Parents Council called on all parents to express their "horror" at the restrictions placed on second-level schools.
And pressure is building up on the Government to do yet another u-turn -- this time on the ending of substitute cover for teachers on uncertified sick leave, or those on official school business.
"The proposal is unacceptable and unworkable," said Ferdia Kelly, general secretary of the managers' body the JMB.
"Our members are furious and outraged that the department would contemplate making schools unmanageable by creating a serious health and safety risk. Boards of management and school management will not be able to stand over this risk.
"Should this proposal go ahead, schools will not be in a position to open in January," he warned.
Mr Cowen told the Dail that confusion and anxiety had been caused to large numbers of older people who would not have been affected by the proposals.
Difficult and challenging measures will have to be implemented in line with the budget announcements, he added.
"It is inevitable in regard to such difficult decisions, which come after a long period of sustained economic growth and substantial increments to benefits for taxpayers in budgets, that the adjustment to the new economic and fiscal environment is difficult," he said.
Fine Gael leader Enda Kenny appealed to the Taoiseach for a "categorical assurance" that when he "rams this shameful, disgraceful and callous decision through, he will not follow it with similar decisions on electricity, telephone and travel allowances."
Labour leader Eamon Gilmore said the Taoiseach was leaving behind the "biggest budget shambles" for years. "Your budget is a mess," he said.