 |
| Taoiseach Brian Cowen |
Taoiseach Brian Cowen signalled on Sunday, that tax revenues may fall to €32 billion in 2009, compared with €47.8 billion in 2007 and 2009 public spending of about €58 billion. A deficit of €26 billion this year has to be met with borrowings, spending cuts and tax increases.
The plunge in property taxes and decline in income taxes over the last decade, means the Exchequer is faced with what is called a "structural deficit" of about €16 billion, which will not be materially offset by a global economic recovery.
The Taoiseach told political correspondents, that people “need to understand and know,” that five years will be needed to bring the situation under control.
Last week, Finance Minister Brian Lenihan told the Dáil, that the projected tax take for 2009 will be €34 billion as against the €37 billion estimate in January. Last year tax revenue was €41 billion and in 2007 it was €47.8 billion.
Lenihan told Fine Gael finance spokesman Richard Bruton, that the January 9th Government forecast of tax receipts in 2009 of €37 billion, which was set out in a document prepared for the European Commission, had been revised. “Only €34 billion in tax receipts would be collected in 2009, representing a year-on-year decline of over 16 per cent,” he said.
Speaking after a Sunday Cabinet meeting to finalise the details of the April 7th emergency budget, Cowen said: “We have basically 2009 living standards in terms of wages and services, on the basis of revenues that are more akin to 2002, 2003.”
Tax revenue in 2002 was €31.7 billion and in 2003 was €32.8 billion.
“It is a stark comparison. It is my effort to convey the magnitude of the problem,” the Taoiseach said.
He acknowledged, that the Government must get the balance right between spending cuts, taxation increases and borrowings to protect “a fragile economy.”
Having assumed leadership at a time when the global economic crisis was exposing the unstable foundations of the Celtic Tiger economy, Cowen has reason to regret that he and so many others, had deluded themselves into believing the free lunch had been invented.
On Sunday, in his meeting with political correspondents, the scale of the crisis, is reported to have induced a departure from the unsustainable argument, that Ireland's economic woes, can be solely attributed to global conditions.
"Do I take responsibility for some of the decisions that I have taken? I take all the responsibility for all of the decisions that I have taken in my public life. And they were taken by me on the basis of the best possible advice available to me at the time. Are there changes that I would contemplate were I to know now that we would be in this position? Of course, there’d be different decisions that you would take. But we don’t all have crystal balls. We can’t all see into the future with great accuracy,” he said
“ But all of the decisions that we took were taken on the basis of the best advice at the time. Do I regret? I regret anyone that is unemployed in this country; I regret the fact that anyone is facing anxiety and concerns. Of course I do. Am I fully responsible for that? No. But do I take my share of responsibility in respect of it. Of course I do. I have never suggested otherwise."
“If I was the sole contributor to this, I would have the solution today to get out of it. There is a global, wider context to this."
“We did create more employment than anybody else. We did have these improvements. We did halve our debt. We did increase our social welfare payments well beyond the cost of living. We did a lot of good things,” he said.
