Budget to be 'fair but very firm', says Dempsey

The Government will deliver an emergency budget next week that will be “fair, but very, very firm”, Minister for Transport Noel Dempsey said this morning.

Mr Dempsey said the budget, to be presented to the Dáil by Minister for Finance Brian Lenihan next Tuesday, was in the final stages of preparation. The “broad scope” of expenditure cuts and borrowing requirements has been decided.

He said Mr Lenihan was putting the finishing touches to taxation measures and these would be presented to Cabinet on Tuesday.

Mr Dempsey insisted this would be the final budget for 2009. "We are preparing the document in such a way as we give people an idea of where we're going, not just for the remainder of this year, but medium-term and longer-term," he told RTÉ's Morning Ireland.

He said the budget will be based on Department of Finance figures published yesterday showing the Exchequer income will be about €34 billion for 2009.

The Government was trying to reassure taxpayers by setting out the tax rates they’ll be facing this year, he said. There is still a lot of money in the economy and people need to be given the confidence to start spending again, Mr Dempsey added. Vat and excise duties are down because people are “afraid” to spend.

He accepted the Government couldn’t bring “absolute certainty” in this budget. “There’ are no pop-up solutions to what is the greatest crisis since the 1929 crash.”

Mr Lenihan was “looking at” the cost of social welfare, which accounts for €22 billion each year. “Every area of public expenditure has to be scrutinised and will be scrutinised over the next two or three years. Nothing is ruled out at this stage.”

He said the Government was not afraid of taking tough decisions to get the economy back on track and he would rather lose his seat than take “easy options” that are not sustainable for the future.

“We’re trying to draft a budget that’s fair but very, very firm. It’s not going to be easy,” he said. “Those who have most will pay the most. We’re going to try and protect the most vulnerable but everybody’s going to have to make a contribution.”