ECONOMY:FINE GAEL and Labour have both said they would stick to their promise of achieving exchequer savings for next year of €6 billion and €4.5 billion respectively when unveiling their alternative four-year plans for recovery later this week.
The parties will separately publish their documents on Friday, outlining their budgetary proposals for 2011 and their policies for reducing national debt by €15 billion to bring the deficit back to 3 per cent of national income by 2014.
Spokespeople for both parties said last night there may be some changes in their respective documents as a result of the bailout plan agreed with the EU and IMF last weekend. Both referred in particular to the decision by the Government to contribute €17.5 billion from the National Pension Reserve Fund to the programme.
The Fine Gael spokesman said its document would take into account the new financial reality that the country has faced since last weekend, but the changed circumstances would not affect the integrity of the party document.
“We are still committed to taking €6 billion out but we still believe that we can offer a more than credible growth strategy, despite all the money that has been lost from the pension fund. There is still €6 billion there that can be used for growth purposes.”
The document, he said, would contain very specific proposals for next year, including costings. The party has committed itself to a three-to-one split between cuts and taxes in order to achieve adjustments of €15 billion by 2014.
The format the party will adopt for the four-year plan is likely to be a critique of the Government’s plan published this week, as well as an outline of Fine Gael’s alternative proposals.
These include more radical restructuring of the public service, with 30,000 fewer jobs (including the 3,800 voluntary redundancies) in the HSE. The document will also include plans to sell off State assets, including parts of the ESB and Bord Gáis, as part of its New Era jobs stimulus programme.
The spokesman accepted this part of the plan would probably necessitate renegotiation with the EU and IMF. The programme stipulated revenue from such sell-offs “must be allocated to debt reduction”.
In contrast, the Labour Party document will propose that the savings over the next four years will be achieved in a 50/50 split between cuts and new taxes. The party will propose some €4.5 billion in adjustments for next year. The document will also reflect the party’s strong opposition to the pension fund being used as part of the bailout for the banks.
Party leader Eamon Gilmore has already stated he is against any new taxes for those earning under €100,000 or any cuts in social welfare. He also proposed a new tax of 48 per cent for those earning over €100,000 as well as a higher second-home tax.