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Kevin Doyle: Health and welfare all likely to be hit in ruthless Budget

THE country is set for stringent cuts after Finance Minister Brian Lenihan warned that the €3bn in planned savings is only a "minimum" figure.

The warning will leave hard-pressed taxpayers even more fearful of December's Budget as it appears the Government will be harsher than previously believed.

Ministers today refused to put an exact figure on how much will be taken out of the economy but hinted that the goalposts have moved significantly.

Mr Lenihan made the revelation at the annual Fianna Fail think-in, where he said that the government would be "relentless" in its efforts to reach to make massive savings.

It can be expected that health, social welfare and education will be the three worst hit areas, while the Cabinet will also be devising new ways of raising money for the exchequer.

Mr Lenihan said: "What I've made clear at all stages was that the figure of €3bn was a minimum. The figure of €3bn is a minimum but clearly Government will have to look at the different departments."


Last year, the Government used swingeing cuts to take €4bn out of the economy, despite criticism from some experts who believed that it would damage the economy.

Now there are fresh fears that this year's budget could be nearly as bad.

Fine Gael's finance spokesperson said the minister's statement showed that Anglo Irish Bank was "beginning to bite".

"As the markets get jittery over the Anglo black hole, the Irish people face even larger tax increases and service cuts in December than they had been led to expect," he said.

Mr Noonan said the timing of the announcement was driven by "a desire to stiffen the resolve of backbenchers for these deeper cuts".

However, Mr Lenihan said the Government had been "ruthless" last year in reaching its targets and needed to do likewise again.


"This year we will be relentless in securing the necessary target which we have agreed with the European authorities and I agree with them," said the minister.

He added that the previously publicised figure of €3bn was only an "indicative figure". "Clearly there is scope for the Government to increase that figure if they are so minded, but again no decision has been taken on that at this stage."

He refused to put a maximum figure on how much the Government would try to save in the Budget.

And Enterprise Minister Batt O'Keeffe said the final figure wouldn't be revealed until Budget day. "We are just at the beginning of a process," he said.

Mr Lenihan also laughed at Enda Kenny's prediction that it will take 10 years to fix the economy, saying it was vastly wrong.

He said: "If given the chance I'll have this problem sorted out a lot earlier than 10 years."