Cowen Announces Slashes In The Budget To Reduce Costs

The Taoiseach, Brian Cowen T.D., has announced a series of measures taken as part of the Government's Implementation of the Framework on Stabilisation, Social Solidarity, and Economic Renewal.

The adjustments, agreed by Government, will deliver in excess of €2 billion in savings over the next year and are said to "represent a huge political, economic and social challenge for every single person" in Ireland.

The savings will be achieved through the following full-year expenditure savings announced by the Government:  

• €1.4 billion on the public service pay bill, the great bulk of which will be achieved through a new pension-related payment to be made by all public servants (including employees of local authorities), with a small element of the total to be secured through reductions in travelling and subsistence rates and other savings. 
• In addition, the increases provided for under the Review and Transitional Agreement with effect from 1st September 2009 and 1st June 2010 will not now be paid on those dates;  this will deliver savings of €1billion in 2010
• €95 million through a reduction in Overseas Development Aid;
• €80 million through a general reduction of the order of 8% in all professional fees, for example in the legal and medical areas;
• €77 million through a reduction in the Early Childcare supplement from €1100 to €1000 per year and a restriction to children under 5.
• €140 million through "general administrative efficiencies and savings", including  through further savings in Advertising, PR and Consultancies; and through savings on Defence equipment;
• €300 million through an across-the-board reduction in the 2009 Budget's capital allocations.

Despite the budgetary constraints, the Taoiseach said that the Government was committed to "maintaining proportionately the largest capital investment programme in Europe."   

He went on to say that "we will continue to commit considerable expenditure on roads, on schools and on housing.

"We are investing significantly in important infrastructure and research and development to drive competitiveness, growth and jobs in the future."

The Taoiseach reiterated that, "we have proportionately the largest investment programme in the EU.

"This is an investment in the future as well as being our very own stimulus package for the Irish economy."

The Government now plans to bring forward further measures in areas which will ensure that "we get the maximum impact from resources available and that innovative approaches are used to maintain people in employment as well as assisting those who lose their jobs."

The Taoiseach concluded by saying "this further saving of €2 billion is the next step in stabilising our public finances. 

"We will continue to work with the social partners on the basis of the Framework we agreed last Friday, in order to maximise economic activity and employment in the short-term and helping those who lose their jobs. 

"The Government is committed to working with all stakeholders to confront the challenges this country faces in a global recession. 

"We will provide the necessary hope and direction and we will take the difficult decisions now in the interests of the country and our people. "