Lenihan to disclose scale of budget cuts for 2011

THE GOVERNMENT will disclose tomorrow the size of the adjustment it intends to make in the upcoming budget.

Minister for Finance Brian Lenihan said last night that the Cabinet has decided to share the information with the Opposition and the public after a review of the transcript of last week’s two-day Dáil debate on the economy.

Mr Lenihan denied the decision to bring forward the release of its multibillion euro figure for the budget adjustment was influenced by the sharp increase in interest rates for Irish debt on international bond markets.

Mr Lenihan said he came to the view that it was important for the Opposition and public to have possession of the information as soon as possible.

The Cabinet will finalise the figures for the size of the adjustment – widely expected to be between €5 billion and €6 billion – at a special meeting tonight. It will also sign off on its figures for growth projections between now and 2014.

It will then disclose the figures to Opposition parties tomorrow.

In a briefing to journalists last night, Mr Lenihan defended his comments from last year’s budget that the Government had “turned a corner” on the basis that they had to be judged in the context of the time.

“At the end of 2009, we had seen a 10 per cent decline in national wealth. At the time my department forecast a small decline this year in GDP and in GNP.

“As this year has materialised, we have not seen a small decline but a return to economic growth on a small scale.

“We have turned a corner.”

Mr Lenihan continued by accepting that the problem of the banking sector and the public budgets had caused very great problems, the extent of which had not been foreseen.

“We have finalised the assessment of the risk associated with the banking sector. It has emerged as a substantial risk but manageable . . . I would have preferred if we turned more of a corner in relation to the public finances,” he said.

In a comment on the resignation of Dr Jim McDaid, Mr Lenihan rejected out of hand the Donegal TD’s argument that a general election was needed.

He cautioned that an election would have very negative consequences if held at this time.

“I find it very difficult to see how we can have a general election in the midst of the type of international financial difficulties we are facing at present and how it will assist us in any way.”

“In the absence of that option I think it’s vital that everybody in the Dáil understands the implications of his and her vote on [the four-year fiscal] plan and this budget,” he said.