29/06/2009

€5bn Cuts To Come Next Year

An Irish economist is expected to deliver recommendations for €5 billion of the toughest spending cuts in the State's history tomorrow.

Colm McCarthy will present the controversial plan to Finance Minster Brian Lenihan tomorrow and could lead to some of the toughest public sector shake-ups in a generation.

The Special Group on Public Service Numbers and Expenditure Programmes, An Bord Snip Nua, will print its sweeping report soon and deliver it to the minister for consideration.

The news comes as the Labour party claims there have been leaks and planted stories in the media over the past few days from Fianna Fail, who they say are gauging public opinion over the cuts that are to come in the December budget.

Labour TD Roisin Shortall said the Labour Party did not believe there was any case for cutting basic social welfare rates that are barely above subsistence levels.

"It is all very well for academics or commentators to look at the overall social welfare budget of €21bn and say, as the McCarthy group is reported to be recommending, cut it by €1.5bn. However, if this is applied to individual rates, a person on the basic rate of jobseekers allowance would see their weekly income cut from €204.30 to €189.72 - a cut of €14.58. How many people could live on €189.72 per week?" the Labour TD said.

She added: "The fact is that in the past two budgets cuts have been made that have resulted in a drop in income for many of those dependent on social welfare, creating significant hardship in some cases."

(DW/JM)

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