€15bn Cut Will Affect Living Standards

The Taoiseach has admitted the Government's unprecedented €15 billion cut in spending over the next four years will affect living standards.

Brian Cowen made the admission this morning after a two day cabinet meeting where minister's drew up a plan to tackle Ireland's vast deficit.

The Government revealed today that it will "frontload" a major part of the planned €15 billion four-year adjustment into the 2010-11 budget, which will see a reduction in the usually ring-fenced front line health services and education.

The figure is far greater than the total suggested in the budget last year, leading some commentators to speculate that the Government is aiming at a moving target.

In a statement this morning, Mr Cowen said the Government had decided that the overall adjustment of €15 billion over the next four years was warranted in order to achieve the target deficit of 3% of GDP by 2014.

"The Government realises that the expenditure adjustments and revenue raising measures that must now be introduced will have an impact on the living standards of citizens," the Taoiseach said.

Before adding: "But it is neither credible nor realistic to delay these measures. To do so would further undermine confidence in our ability to meet our obligations and responsibilities and delay a return to sustainable growth and full employment in our economy.

Mr Cowen said the key reasons for the significant increase from the figure announced in Budget 2010 are lower growth prospects both at home and abroad along with higher debt interest costs.

Responding to the announcement this morning, Labour Spokesperson on Finance Joan Burton claimed the Government had refused to publish key information that would explain the basis for the figure.

Speaking this morning, Ms Burton said: "They continue to be unable to give a clear answer to the question of what, in their view, the impact on growth and employment will be of a greater or lesser adjustment in 2011.

"They have not given a figure for what savings they expect to make from the Croke Park deal. Frankly, if this is the basis on which the Government is having its two-day meeting, then its little wonder that the country is in the mess it is in."


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