'The over-riding issue facing Ireland in the year ahead is the stability of our public finances,' business and employers organisation IBEC said today in its submission on the next Budget.
IBEC Director General Turlough O'Sullivan said: 'Unless very serious corrective action is taken - beyond that already announced - the public finances will deteriorate considerably further in 2009. We cannot allow this to happen. This could have far reaching implications for Ireland's position within the European Monetary Union and would be extremely damaging to the country's reputation in the international investment community.
'If we show courage and judgement now, Ireland will weather this storm and will be in a solid position when there is a resurgence in global economic activity.'
Without further measures, the exchequer deficit as a percentage of GDP at 10% will be the highest since 1986, while the general Government deficit would be more than double that allowed for in the EU Stability and Growth Pact.
IBEC is asking the Government not to increase tax or PRSI.
It says that the Government must take a resolute approach to current expenditure, which should be reduced by €2.5bn from that currently planned for 2009.
IBEC is calling for an overall reduction in the size of the public sector. 'The public sector wage bill should be reduced by 5%,' IBEC said.
IBEC also believes that Government's ambitious programme of capital investment should be continued, 'as this will help cushion some of the slowdown experienced elsewhere in the construction sector and address serious deficits in the country's infrastructure'.
The detailed IBEC submission spells out measures on taxation, energy efficiency, reprioristising the National Development Plan and on improving productive capacity.
