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Cowen defends 'fair balance' Budget

Brian Lenihan - Second Budget delivered
Brian Lenihan - Second Budget delivered

The Government has won the first of a series of votes on financial resolutions arising from the Budget. The vote - related to changes made to the income levy - was 85-75.

The second financial resolution has also been passed by the Dáil.

The resolution dealt with the changes to mortgage interest relief. The vote was won 84 - 71.

Resolution 3 was accepted without a vote but a vote was called on resolution 4, pertaining to the 5c increase on diesel.

The Government won that vote by 84 - 23, which will mean the increase of 5c on diesel will come into effect from midnight.

The Dáil has also approved resolution 5, on changes to the Capital Acquisitions Tax system.

Meanwhile, Taoiseach Brian Cowen has said he does not accept the Government has taken soft options in today's supplementary Budget.

Speaking at a press conference, Mr Cowen said the Government recognised the impositions being asked, but the scale of the crisis was such that we needed to raise revenues as well as cut expenditure. Mr Cowen said that a fair balance had been struck.

The Minister for Finance, Brian Lenihan, said we were all in it together and those who had most were required to pay the most. Speaking at a press conference, Mr Lenihan said fairness was very difficult to adjudicate on and that the Government had considered the Budget long and hard.

He said that at the end of the day, fairness meant you could not shuffle off responsibility to someone else.

Earlier, Minister Lenihan told the Dáil the Government expected the economy to shrink by around 8% this year, the sharpest fall on record.

He has said he expected consumer prices to fall by around 4% this year, and will mitigate the effects on households of falling wages and higher taxes.

He said the Budget would focus on six areas: the public finances, the banks, competitiveness, jobs, stimulating the economy and restoring our reputation internationally.

Mr Lenihan said we had been damaged by our rejection of the Lisbon Treaty and must now show the world that our financial system is soundly based.