Taoiseach refuses to say if old age pension is in line for cut

ÓGRA FIANNA FÁIL CONFERENCE:TAOISEACH BRIAN Cowen has declined to be drawn on whether the old age pension will be among the social welfare cuts in next month's budget.

Mr Cowen warned, however, that the overall public sector pay bill would have to be reduced, public spending would have to come down to 2006 and 2007 levels, and there would have to be “an adjustment” in social welfare spending as well.

Addressing the Ógra Fianna Fáil National Youth Conference in Bundoran, Co Donegal, Mr Cowen also challenged the Opposition to put forward their proposals for the necessary savings of €4 billion.

He said they had the opportunity to do so during tomorrow’s pre-budget Dáil debate.

Mr Cowen said the Opposition “understand that this level of adjustment is necessary and we’d like to see what constructive ideas there are because the rhetoric of condemnation is not getting us anywhere”.

Asked about calls, including those from Fianna Fáil backbenchers that the State pension be left untouched, Mr Cowen said “this year we’re seeing a reduction in the cost of living – it’s estimated by about 6.5 per cent – so the real value of people’s incomes has improved even in the difficult year we’ve had.

“So we have that opportunity to take that into account in deciding how do we protect incomes in this difficult situation, give careful consideration to these issues but recognise that that provides an opportunity to maintain salaries for people as well.”

Asked about where the cuts would be, he said “the overall pay bill will have to come down”. It was “very clear when you look at the way the budget is constructed, where the expenditure is . . . social welfare . . . public sector pay and pensions . . . and also in relation to programme expenditure, adjustments will have to be made.”

In an impassioned speech to some 500 delegates, he said: “We now have a situation where our tax has gone back to 2003 levels. Our spending obviously is at 2009 levels. Our plan is to bring back spending in the coming years to levels they were in 2006 and 2007.”

Social partnership was the best way forward, but if partnership “is not agreed we still have a duty to do so. The national interest will take over any other consideration.” There was a structural problem that had to be addressed of between €10 billion and €14 billion “and the first tranche of savings will be made in this budget, of the order of €4 billion”.

He said “what we seek to do now is in the national interest, not because we want to court short-term popularity, not because we want to be involved in politics of condemnation or the politics of the soundbite”.

He called on the party “not to accept the defeatist factionalism that is going on for public comment in this country for far too long. Let Fianna Fáil stand up and say ‘Yes we will fix this’. ”

The only way to return to prosperity was through increased productivity. “It means simply that we must get more for less . . . the taxpayer has not the capacity to provide the €45 billion that we’d hoped we’d have this year when in fact it’s only €32 billion.”

Referring to “post-conflict Ireland”, he said: “Regardless of what crisis there is in the public finances we will proceed with those projects because we believe in them as a concrete expression of the republicanism we espouse to in the 21st century.”