State needs 'step back' to advance

The Government has warned no one can be sheltered from the fiscal adjustments needed to restore the public finances to health but it pledged there would be no return to the onerous tax burdens of the 1980s.

At a press briefing on its austerity plan in Government Buildings today, Taoiseach Brian Cowen said the State would have to “take some steps back to go forward again”.

Describing the four-year plan as a signpost along the road to national recovery, Mr Cowen said the measures would “help dispel uncertainty and reinforce the confidence of consumers, businesses and of the international community”.

"Those who can pay the most will pay most, but no group can be sheltered," he said.

“The tax and expenditure measures contained in this plan will negatively affect the living standards of citizens in the short term."

However, the Fianna Fáil leader insisted that postponing the measures would lead “to greater burdens in the future for those who can least bear them,” and would also jeopardise the country’s prospects of returning to sustainable growth and full employment.

“It’s a time for us to pull together as a people,” he said.

Minister for Finance Brian Lenihan said the plan was a rational and sensible route out “the steep downturn”.

He said the large spending cuts were focused on the areas of greatest cost, which are public sector pay, pensions, social welfare and programmes relating to capital investment.

Green Party leader John Gormley said his party’s contribution to the plan had focused on education and environmental measures, such as water rates, renewable energy and broadband.

“We are proud that education spending will be increased over the coming period. This is vital to protect the needs of a rising generation,” he said.

“Increased spending on education is, above all, central to the efforts to rebuild national prosperity,” Mr Gormley.