PRESS CONFERENCE:THE GOVERNMENT'S four-year plan would provide the only basis for real recovery and for surmounting the deepest economic crisis since the foundation of the State, Taoiseach Brian Cowen said yesterday.
Minister for Finance Brian Lenihan also contended that the document had to be the basis for any sensible proposals put forward in the next general election. “Anything else is nonsense,” he said.
At the press conference to unveil the 140-page document – which contains detailed proposals outlining €10 billion in cuts and €5 billion in new taxes over four years to 2014 – Mr Cowen called on the character and resilience of Irish citizens.
He said he was confident the grave situation besetting the country could be overcome.
“We are a smart, resilient and proud people and we are going to come through this challenge because we love our country and we want to make sure our children have a good future.
“Lessons will have to be learned. We provide policy and framework that will get us through,” he added.
“It’s a challenge that can be surmounted. I am confident that talent and will and courage of our own people will make this a reality for us as a people,” he said.
Though there were challenging times ahead, the people would “pull though as they did in the past”, Mr Cowen added.
The majority of the Cabinet was present for the press conference in Government Buildings. Mr Cowen was joined at the podium by Mr Lenihan and Green Party leader John Gormley.
Outlining the main thrust of the plan, Mr Cowen said it would necessitate going a few steps back to go forward. He said that once the plan was fully implemented in 2014, income tax would return to [higher] 2006 levels; public spending would return to [lower] 2007 levels and public sector numbers would be at 2005 levels, which is 25,000 lower than current numbers.
It was time for the nation to confront the challenge in a united way, he said; those “who have most will make most contribution. Those who have least will pay less”.
The main priority of the plan was to reduce unemployment and create jobs in the economy, he noted. “We believe that implementing this plan will get unemployment under 10 per cent. That’s the big priority for our people,” Mr Cowen said.
It would combine cuts with growth, which he asserted would be 2.7 per cent each year over the next four years.
He said the economy’s potential for growth would be based on the country’s native industrial base; foreign directive investment, internationally traded services, agriculture, tourism and on its well-educated population.
Mr Lenihan asserted the four-year plan was “the Government’s work” and that neither the International Monetary Fund nor the European Commission had any input into its preparation.
He said there had been positive signs in the economy this year, such as tax revenue being ahead of projections and public spending being contained. He said the Government deficit would fall from 11 per cent of Gross Domestic Product to 9 per cent next year.
“We are beginning to pay our way in the wider world. All this paints a picture of an economy that is returning to growth after a period of deep recession,” he said.
Asked about Labour leader Eamon Gilmore’s assertion that €4.5 billion was a more appropriate adjustment than €6 billion, Mr Lenihan said the higher adjustment was the minimum needed to get the deficit back down to single digits and to bring us into line with every other EU country.
Mr Gilmore should inform himself about basic facts, he added, and accused the Labour leader of producing “simple cure-all solutions”. Mr Lenihan also denied the proposed tax changes would be felt most severely by middle income earners. “It will [work out] at €20 a week for the individual taxpayer”.
The Taoiseach and Mr Lenihan conceded the €85 billion loan facility from the EU and IMF had not been included in the document, as it was still subject to negotiation.When it was put to him that the increased debt burden would necessitate even more cuts, Mr Cowen and Mr Lenihan said they would deal with that once the negotiations with external agencies had concluded.
Mr Cowen also disclosed that another State outside the euro area, Denmark, has also offered a bilateral loan to Ireland, in addition to Sweden and Britain.
“This document has to be the basis of any recovery,” Mr Cowen said.