Cowen calls on parties for details on €4bn saving

TAOISEACH BRIAN Cowen has challenged the Opposition parties to spell out in tomorrow’s pre-budget Dáil debate how they intend…

TAOISEACH BRIAN Cowen has challenged the Opposition parties to spell out in tomorrow’s pre-budget Dáil debate how they intend to achieve savings of €4 billion next year, but they have accused him of trying to engineer “a sham debate”.

Over the weekend, Mr Cowen emphasised the need for spending cuts but Labour Party leader Eamon Gilmore said extra taxes, including a new third rate of tax for those earning over €100,000, should play a significant part in achieving the necessary adjustments.

Fine Gael deputy leader and finance spokesman Richard Bruton said his party had consistently put forward constructive proposals but had been ignored. “Brian Cowen is trying to reduce this to a sham debate about cuts. It is really about whether the Government has the vision to transform the country,” he said.

In another development yesterday, Minister for Health Mary Harney said she was looking at the introduction of prescription charges for medical card holders.


"It is on the table. It could be something like 50 cent per item prescribed. We have to do two things: we have to raise money and we have to discourage overprescribing and the overuse of medication," she said on The Week in Politicsprogramme on RTÉ television last night.

All of the Dáil parties will have an opportunity to spell out their approaches in what is expected to be a bruising debate tomorrow.

At the weekend, Mr Cowen said he would be asking Fine Gael and Labour to say what corrective action they proposed.

“We will challenge the Opposition parties to produce coherent proposals on how the necessary savings in the magnitude of €4 billion can be achieved. The country deserves to see the alternatives rather than just hear the constant rhetoric of condemnation,” he told the Ógra Fianna Fáil conference in Bundoran.

“It is becoming increasingly clear that Deputy Kenny and Deputy Gilmore are strong on rhetoric but short on specifics. It’s time for them to park the soundbites and to be honest with the people as to what exactly is their budgetary policy.”

Mr Cowen said there was now an opportunity to take action to stabilise the budget deficit, as prices were falling at the fastest rate in 75 years.

Mr Gilmore told a Labour pre-budget seminar that while he accepted the need to achieve adjustments of €4 billion he did not accept that spending cuts alone were the appropriate way. He said the target could be reached through a combination of agreed public service reform, a reduction in the capital budget through lower tendering prices, more revenue from taxation through the elimination of tax relief for landlords and a new third rate of tax on incomes over €100,000.

“It is necessary, given the crisis we face, that those who have most must contribute most. And, however weak they may be, at a minimum, the proposals in the Commission on Taxation on tax exiles should be introduced in this budget,” he said.

“Fianna Fáil take the opposite approach. They talk the language of fairness, but they insist on pursuing cuts in social welfare, without seeking any contribution from the better-off in society, said Mr Gilmore.

Mr Bruton said last night that Fine Gael believed the adjustments should be made by roughly €3 billion in cuts and €1 billion in tax increases.

He dismissed the Taoiseach’s remarks, saying that Mr Cowen as minister for finance had failed abysmally to reform the public service and was in no position to lecture the Opposition about its responsibilities.

“The issue is not whether the Opposition has the courage to spell out its policies. Fine Gael said clearly a year ago that public service pay could not be increased and that increments should not be paid but the Government ignored us . . .”

Sinn Féin says the budget should introduce a "wealth tax" to raise €1.6 billion, increase betting duty to 10 per cent and treble the annual tax on second homes. In a pre-budget submission, The Road to Recovery, the party set out proposals it said would raise and save €7.623 billion mainly through tax increases "for those who can afford to pay".