Taoiseach Brian Cowen said today said the gap in public finances between revenue and expenditure “has to be stabilised and cut” in the forthcoming budget.
Speaking in Clonmel, Co Tipperary today, Mr Cowen said the current tax revenue was at 2003 levels and there was a shortfall of €23 billion. “That’s not a sustainable position,” he said. "We have to address that."
Mr Cowen’s comments were echoed by a number of other Ministers seeking to present a united front to taxpayers ahead of the forthcoming budget.
Minister for Finance Brian Lenihan said by making the right decisions now the country’s economy will be better in the future.
“We can’t let borrowing go to an unsustainable level, we can’t keep increasing taxes to solve our problems we have to look at our expenditures and look at them in an appropriate manner," he said. "The Government is considering all these matters at present and decisions will be announced in due course."
Minister for Health Mary Harney warned that if the Government doesn’t take tough decisions now, the International Monetary Fund would make them for the country.
“We are currently spending €500 million a week more than we are raising that’s not a sustainable situation," she said. “I believe if we make very tough decisions this year and next year we will see light at the end of the tunnel.
“It’s not going to be easy, it’s going to be incredibly difficult but we’re going to have to do it otherwise if others come in like the IMF because we haven’t the capacity to make these decisions then they will immediately start cutting expenditure by 30-40 per cent”.
Minister for the Environment John Gormley said that while no definite decisions on cuts have been made at this stage, every single department will have to be looked at.
“The larger departments with higher current expenditure are going to have to look at their particular budgets and cut down accordingly," he said in Tullamore, Co Offaly. "It is going to be a difficult budget - there is no reason why we should mislead people on that, we have to tell people the truth."
Mr Cowen also said Government ministers and senior officials in the public sector would have to “set a good example” by taking substantial pay cuts.
Last night, Mr Lenihan said he had received the latest report by the body which examines pay levels for the higher grades in the public service, including politicians, civil servants, judges, university heads and executives of State agencies and bodies.
“There will be substantial reductions in ministerial and senior official salaries,” Mr Lenihan said, adding that he has benchmarked their pay against their counterparts in Europe.
The Taoiseach said senior public sector staff, including politicians, had to “set a good example” to address the Exchequer deficit. While Ministers had already taken a 10 per cent pay cut, further cuts must be introduced next year.
Meanwhile, Fine Gael’s Leo Varadker agreed with the need to introduce the cuts saying it would be “socially irresponsible” not to reduce public spending.
“If we don’t correct the public finances quickly we are going to end up in a death trap where essentially in a few years time a substantial part of the taxes that we raise will just go into paying the interest on the national debt," he said. "If we don’t do it now because of the amount of debt we have run up there will be no money to pay pensions or public sector pay or to look after children or provide medical cards."