Emergency budget to be delivered on April 7th

The Government is to deliver its emergency budget aimed at stabilising the public finances on Tuesday April 7th, Taoiseach Brian Cowen told the Dáil today.

Announcing the date during this morning's Leaders' Questions, Mr Cowen said the economy now looked likely to contract by up to 6.5 per cent this year – considerably more than earlier estimates.

“As the year has progressed we have seen a serious deterioration in the public finances taking place, which is mirrored by what’s happening in the international economy,” he said.

“As a result, the Cabinet intends bringing a supplementary budget before the house in early April.”

The April 7th date, Mr Cowen said, would allow the Dáil three days – Tuesday, Wednesday and Thursday - to debate the measures contained in the budget.

He also suggested the House should resume a week early from its Easter recess on April 22nd to continue the debate.

Referring to the contraction in the economy, Mr Cowen said: "It was said at budget time it would be in the region of 2 per cent. We said in January it would be about 4 per cent".

"The indications are now it could well be 6-6.5 per cent. So that shows you the fragility of the economy," he said.

Yesterday, the governor of the Central Bank, John Hurley, told an Oireachtas Committee that the economy would shrink by more than 6 per cent – 2 percentage more than its prediction just over a month ago.

During today's debate, Fine Gael leader Enda Kenny complained that Opposition parties were being invited to engage with the budgetary process but were not being briefed on the range of taxation proposals and spending cuts under consideration.

Mr Kenny said the Opposition was being asked to make “constructive suggestions” without being given the full range of proposals being considered by the so-called An Bord Snip Nua - the body charged with reducing the State’s huge budget deficit - and the Department of Finance.

Mr Cowen he was willing to have a pre-budget debate in which the Minister for Finance could explain to the House what measures were being looked at.

But he warned said the decisions on where to cut public spending and increase taxes, whilst necessary, would be difficult "as there are no easy options".

Ministers are understood to have briefed in detail by officials from the Department of Finance about the options facing them at special Cabinet meeting in Government Buildings this morning.

Mr Cowen has pledged there will be a normal Dáil debate after the emergency budget is announced which will be followed by the publication of a Finance Bill within the normal timeframe.

Ministers will have to decide on the balance to be struck between tax increases, cuts in public spending and a scaling back of the National Development Plan (NDP) in order to find an extra €4.5 billion for the rest of the year.

That figure comes to €6 billion in a full year.

Asked about the proposed budget measures today, Tánaiste Mary Coughlan said the Government had made no final decision.

"We’re basing our decision on the outcome of the February figures which, quite obviously shows a huge shortfall, and it will be a mixture of measures that will be taken. It’s very important that we don’t have a deflationary aspect to our economy but equally it’s very important from an international perspective – and given that we have an undertaking with the European Commission on 9.5 per cent on borrowing – then it’s important that we obtain that target.

"It’s going to take some time until that final date and all Ministers will be deliberating and coming to final decisions in due course."