Cabinet derided over lack of vision for crisis

REACTION:OPPOSITION PARTIES yesterday derided the Government for its "appalling mishandling" of the economy, and for lacking the vision to tackle the present economic crisis.

Both Fine Gael and Labour said figures contained in yesterday’s Pre-Budget Outlook reflected what they claimed was a dismal performance by Government.

Fine Gael deputy leader Richard Bruton said the document confirmed that the crisis in public finances and rising unemployment rates could not be separated. “The figures once again highlight the complete absence of a jobs plan from Fianna Fáil and the Greens, with absolutely no new thinking,” he said. The only assumption to take was that no end to the recession was in sight, with 72,000 further job losses expected next year.

“Unemployment is expected to rise to an average of 13.75 per cent next year, and that is only because the Government has ‘turned on the tap’ of emigration and is relying on people dropping out of the labour force,” he said.

Labour deputy leader Joan Burton said that while corrective action being taken by the Minister for Finance was necessary, she added it was “Fianna Fáil’s reckless stewardship of the economy that brought us to this sorry pass”.

“The document correctly points out that there is a cyclical and a structural component to the deficit. The latter is the ‘Fianna Fáil deficit’, roughly half of the overall deficit, which was allowed to develop over the course of a decade of economic mismanagement and fiscal profligacy,” she said. “By stoking the property bubble, and through their abject failure to control the excesses of the banking system, they have brought us to a position where very substantial budgetary consolidation is necessary.”

In his detailed response, Mr Bruton, Fine Gael’s finance spokesman, said every job lost next year would add €20,000 to Government borrowing. “That is why social welfare spending is projected to rise by another €1.8 billion next year, and why tax revenues are projected to fall by another €2 billion, even after the €6 billion in tax hikes announced by the Government in the last two budgets,” he said.

“Fine Gael’s approach to the budget will be to develop and advocate policies that restore our national competitiveness and help the country to trade its way back to economic growth. Without a jobs stimulus package, the Government’s spending cuts will kill off any chances of an end to the recession in 2010.”

Sinn Féin’s finance spokesman Arthur Morgan said the €4 billion in cuts being proposed for next month’s budget would affect the most vulnerable in society. Speaking on RTÉ, he said his party would oppose social welfare cuts.