Howlin outlines where cuts will hit

Monday 05 December 2011 19.15
Health budget down by more than €500m, €475m from Department of Social Protection
Health budget down by more than €500m, €475m from Department of Social Protection

The Minister for Public Expenditure & Reform, Brendan Howlin, has announced details of €1.4 billion in spending cuts next year.

More than two-thirds of the cuts will hit the Departments of Social Protection and Health.

Mr Howlin said the public sector pay bill is to fall by €400m next year.

This is between already announced job cuts, as well as savings next year of 10% in overtime and 5% in allowances and premium payments.

€475m is to be cut in Social Protection, with child benefit payments for third and subsequent children reduced and a cut of six weeks in the cold weather allowance.

€543m is to be cut in health, with extra charges on private treatment in public hospitals, and 2% 'efficiencies' in disability, mental health and children's services.

Third-level student contributions will be increased by €250 next year, while there will be a 2% cut in core funding for higher education.

Full details of cuts for each department were published in the Comprehensive Expenditure Report.

In other areas, Environment Minister Phil Hogan has announced the publication of the Bill to provide for the introduction of a household charge of €100 per house from January 1, whiel Transport Minister Leo Varadkar has signalled a rise in transport fares next year because of cuts to CIÉ's subsidy.

Among the other measures included in today's Budget are a €79m cut in spending on the Garda Siochana, through payroll and pension savings, concentration of resources in high priority areas and greater use of civilian staff and the Garda Reserve.

Justice Minister Alan Shatter said this evening that 31 Garda stations are to close next year. Eight stations that are already non-operational will not re-open.

Several stations in Dublin will also have their opening hours reduced.

There will be a €52.9m cut in Overseas Development Aid and €17m will be saved in the Department of Defence, by reducing personnel. There will be a total saving in Agriculture of €105m, including €30m from the Disadvantaged Area Scheme and €19m from REPS.

Howlin defends main spending measures

Minister Howlin said the Labour Party had protected the commitments it made as best as it could, but knew when it went into government that it would have to make harsh decisions.

Speaking on RTÉ's 6.1 News, Mr. Howlin said 44% of students would not be affected by the decision to raise the student registration fee because they were in receipt of a grant.

He also said that means testing child benefit would be an expensive process and taxation of the payment was not possible.

Minister Howlin said the increased charges for private beds in public hospitals were introduced because he did not believe that the public health system should subsidise the private system.

Earlier, he told the Dáil the Government had to take very difficult decisions in the long-term and strategic interests of the state and its citizens.

He said that for 2012, the country has to implement a fiscal consolidation of €3.8 billion. Of the total adjustment €2.2 billion, or just less than 60%, would be on the expenditure side, with the rest being implemented through revenue measures.

Capital spending will contribute €755m to the consolidation of expenditure in 2012. The Capital Investment Programme for 2012 to 2016 will amount to about €17 billion, including €3.9 billion next year, he added.

The Minister said the pressures on the social welfare budget were enormous. The financial allocation of jobseekers' payments alone was now over three times the 2006 level. The demand for health services has also increased and the number of medical card holders has increased by over 500,000 since 2007. The same pressures are evident on the education system.

Mr Howlin said that today does not mark the end of the expenditure reviews, but that today is a first step. ''We must constantly, and consistently, monitor and review pubic expenditure,' he stated.