Extra taxation is to be imposed in an emergency Budget from the Government by the end of March, following the publication of disastrous tax revenues.
Mr Cowen said the latest Exchequer figures, which show revenue for the first two months of 2009 at €5.7 billion, compared to €7.5 billion for the same period last year, left the country in a “very difficult situation”.
The Cabinet today decided that it will action emergency by the end of this month to ensure that its €18 billion borrowing target will not be over-shot.
The February tax figures were “disappointing”, the Taoiseach told Fine Gael leader, Enda Kenny during Leaders’ Questions in the Dáil. It is “important for the country’s credibility” that the Government stick to its borrowing targets for the year, he told Mr Kenny.
Questioned by Labour leader, Eamon Gilmore, Mr Cowen admitted that the actions needed by the end of the month would include extra taxes. “Whatever legislative arrangements are necessary can be made later,” said Mr Cowen, adding that the Government will publish a three-year plan shortly.
“We will take whatever steps are necessary to ensure that the framework that we set for ourselves, which is for a 9.5 per cent Government deficit for 2009 would be adhered to,” Mr Cowen said. “It’s important in terms of the credibility of the country that we do that.”
“We will in the coming weeks, before the end of this month, come forward with whatever measures are necessary to do so, either in terms of expenditure savings and/or tax raising”.
In December, the Government laid out a five-year strategy to the European Commission to bring Irish finances back under control by 2013.
Mr Kenny said businesses and members of the public were suffering a “crisis of confidence” and called for immediate action. “The problem across country is that nobody can now plan for their future,” he said.
Mr Kenny asked the Taoiseach to outline what decisions were taken by the Cabinet earlier today to address the rising Exchequer deficit. “It’s time to face the reality … that our public finances are under extreme pressure.” He called for a new Budget that is “fair and comprehensive” to restore people’s confidence to invest or spend.