DOMESTIC POLICIES:TAOISEACH BRIAN Cowen has dismissed suggestions that there are tensions between him and Minister for Finance Brian Lenihan over the Government's response to the dramatic shortfall in State revenue.
Mr Cowen said reports about divergences of view between the two men, which he had read, had “no basis in fact”.
“There are no tensions between us at all,” he said. “What we are talking about is the Cabinet making decisions based on proposals that will come from the partners in the normal way.”
On the first day of his official visit to Japan, Mr Cowen told reporters that he and Mr Lenihan were in agreement on what was required and the urgency of the situation. He dismissed reports that he and Mr Lenihan differed over the speed required to implement public sector cutbacks, with Mr Lenihan said to be favouring a quicker decision.
Mr Cowen maintained there were no delays. “There has been deterioration in our public finances in the last three months. That’s been the same in other advanced countries. We have to react to that. We are doing that on the basis of the end-of-year exchequer returns.
“We are in the process this month of discussing with all of the social partners how we proceed, and Government is making it clear that we have to make decisions in the final analysis. That’s where it’s at. There is not a difference between us.”
Mr Cowen defended the social partnership process describing it as problem-solving rather than problem-avoiding.
The Government would not shy away from taking hard decisions, he added, in the event of current negotiations ending without agreement.
“It’s not possible to avoid tough decisions in the circumstances and conditions we find ourselves in. [It is] a big challenge to everybody, and to the country. I want everybody to be part of the solution.” He added the Government did not “contract out” its responsibilities.
Mr Cowen said that upon his return from Japan, talks would be held on January 21st “to see where we stand at that point”. Two Cabinet meetings had also been pencilled in for next week to discuss what he acknowledged were very difficult economic circumstances.
“Clearly what’s happening in Ireland is that we are seeing a big decrease in our tax base. Our tax revenues are well down in 2008 and in 2009 they will be further back. That creates a huge difficulty for us in terms of sustainability of the public finances. You have got to then correct that over a period of years. You have got to begin on that this year.
“We have to work with social partners to see if we can project a way forward.”
The official visit by the Taoiseach marks the 50th anniversary of diplomatic relations between Ireland and Japan. He will meet prime minister Taro Aso tomorrow and pay a courtesy call to Emperor Akihito at the Imperial Palace on Friday.
