FURTHER MEASURES to control public spending next year will be considered by the Government in the coming week, Minister for Finance Brian Lenihan said yesterday. About 10 per cent of current spending was now reliant on borrowing and that position could not continue, he said.
"We can't continue to borrow for day-to-day purposes . . . we have to adjust our expenditure to ensure that it corresponds to what we can afford, we don't have any option on this," the Minister said on the This Week programme on RTÉ Radio.
The Government has not ruled out a suspension of the national pay agreement as advocated by Fine Gael leader Enda Kenny at the weekend.
Mr Kenny's call has provoked a row between Fine Gael and Siptu, the State's biggest trade union, but Government chief whip Pat Carey declined to rule out the proposal.
"Clearly as the economic situation evolves the Government will have to take account of all positions," Mr Carey said yesterday.
Speaking after a graduation ceremony for Reserve Defence Force officers at the Curragh, Co Kildare, Mr Carey said the pay deal was part of expenditure issues which included a significant capital expenditure programme.
While he pointed out that the agreement included a significant pay pause, he added that all spending would be looked at in the coming weeks.
General president of Siptu Jack O'Connor described the Fine Gael leader's proposal as an attack on workers to shore up profits. "Apart from the implications for the living standards of ordinary working people, suspending the pay agreement is about the worst possible approach imaginable at this point in time," said Mr O'Connor.
"It would further depress consumer confidence and exacerbate the recession when what is needed are means to stimulate demand," said Mr O'Connor.
However, Fine Gael deputy leader and finance spokesman Richard Bruton, described Mr O'Connor's comments as "disappointing and short-sighted".
"Enda Kenny set out clearly that any monies saved from such an initiative would be reinvested in strategic infrastructure like schools and public transport and training and upskilling our workforce. This would all contribute to actually improving our prospects of recovery," said Mr Bruton.
Addressing his party conference in Wexford at the weekend, Mr Kenny said the pay deal should be suspended to protect jobs. "The country cannot afford the national pay deal. It is as simple as that. This deal must be suspended for 12 months and reviewed after that. It was negotiated in a different context with different expectations.
". . . Wage restraint in the short-term is preferable to job losses in the long-term," said Mr Kenny.
Lenihan refuses to rule out income tax increase: page 7; Fine Gael conference coverage: pages 8 and 9; Deaglán de Bréadún: Opinion, page 13; Editorial comment: page 15
