Lenihan announces spending cuts to save €440m

CtrlSource

From RTÉ News

"Finance Minister Brian Lenihan has outlined a package of measures aimed at saving €440m in public spending this year.

Mr Lenihan said all Government departments other than Health and Education will be required to reduce their payroll bill by 3% by the end of 2009.

The Minister has also put on hold any more acquisition of property for the decentralisation programme. Pay increases due to Ministers, senior judges and civil servants will not go ahead, but this will be reviewed in September 2010.

AdvertisementThe costs of tribunals will be reviewed so that expenditure is minimised. Minister Lenihan says the Government is hoping to save €440m in 2008 and €1bn in 2009.

He also said spending on consultancy, advertising and public relations would be cut by at least 50% in 2009, and significantly curtailed for the rest of this year.

State agencies will be reviewed to see if they can share services or amalgamate or be abolished, Mr Lenihan said. The review's outcome is to be considered in the autumn.

He also announced savings of €45m in Overseas Development Aid in 2008. The Departments of Finance and Health and Children are to draw up a scheme to reduce surplus staff in the HSE as soon as possible."


Also, see here for full text of his speech.

It sounds like a very sensible plan of cuts. Nothing that really shouldn't be done anyway and glad to see Health and Education are still keeping their budgets (though will they be cut for FY09 in December's Budget?)

pvt.joker

expect the real cuts to come in the next budget.
Tax rises etc.

serfboard

CtrlSource wrote: »

It sounds like a very sensible plan of cuts. Nothing that really shouldn't be done anyway

Indeed. Seems more like an end to the wastage, rather than real cutbacks.

I especially like the fact that "spending on consultancy, advertising and public relations would be cut by at least 50% in 2009, and significantly curtailed for the rest of this year".

Oilrig

Any halfwit can "introduce" savings...

What's being done to stimulate growth & get us out of this downturn?

Are we to wait until the rest of the world decides to wake up?

Get moving Kildare St, now is when you earn your salary... or face the consequences.

FFS!

Sir Digby Chicken Caesar

if they legalised and taxed weed they'd make quite a lot of money, and save thousands of police hours and court hours in the process.
but sensible ideas have no place in politics

CtrlSource

Oilrig wrote: »

Any halfwit can "introduce" savings...

What's being done to stimulate growth & get us out of this downturn?

Are we to wait until the rest of the world decides to wake up?

Get moving Kildare St, now is when you earn your salary... or face the consequences.

FFS!

And what suggestions do you have to stimulate growth?

Give 'em a chance!

LostinBlanch

CtrlSource wrote: »

And what suggestions do you have to stimulate growth?

Give 'em a chance!

Well I'm not impressed so far. We've got a lame duck taoiseach and a minister for finance who is whinging that the finances are bad. There's only so many times you can say the fundamentals of the economy are sound and hope people believe that's enough.

is_that_so

In reality this looks a bit like a hail Mary in that it is not really clear at this point if it'll be enough. It is very welcome and long overdue but by avoiding giving us all of the bad news I suspect that they are storing up more trouble for themselves by not doing so.

Even so it strikes me that many of the cuts were more PR than substance and the choice of a press conference to talk it about merely reinforces this. Considering that Cowen is more of a parliamentarian I am disappointed that he did not let the opposition know.

It also gives the impression that they actually know what they are doing. If that were so why weren't these cuts implemented six months ago?

Why did they have to be dragged kicking and screaming to drop their pay increase and apply some common sense to decentralisation?

Yet again, and FF are not alone in this, it shows a distinct inability to plan and the reactive rather than proactive governments we get here.

I suspect that there will be taxes levied somewhere down the line, however much Haney resists it. If they really wanted to show political cojones they would have admitted this as well rather than the spin and drip-feed they've indulged in so far.

At times like these one hankers after the Charlie tighten our belts speeches, rather than Biffo's "Look the fundamentals are strong , we just need to make some savings".

A bit of realism would not go amiss as long as economists are banned from telling us what that means.:p

Hitchhiker's Guide to...

raising taxes in the current environment would be catastropic. no government is going to do that.

jmayo

Roundtower2 wrote: »

raising taxes in the current environment would be catastropic. no government is going to do that.

They will have no choice, since there is no longer a huge chunk of revenue coming from construction generated VAT and stamp duty.
Income taxes will have to go up and indirect taxes will also be massaged.

How else are we going to pay for all the public servants that were hired over the last 10 odd years ?

The_Minister

is_that_so wrote: »

Even so it strikes me that many of the cuts were more PR than substance and the choice of a press conference to talk it about merely reinforces this. Considering that Cowen is more of a parliamentarian I am disappointed that he did not let the opposition know.

The details of the cuts will be discussed in the Dail later this week. The press conference was merely to give the public the outline of what they were doing.

Économiste Monétaire

Education and Health were announced to be safe from cuts. This morning the Education minister announced that third level institutions must cuts payrolls by 3%. How already underfunded Universitys can cut payrolls is beyond me. Lying ****.

eigrod

UCD_Econ wrote: »

Education and Health were announced to be safe from cuts.

Great. We can be safe in the knowledge then that our kids won't have to sit in damp, leaking & cold portakabins through next winter and that the school principals wont' be writing to us next September for money to fund various initiatives in the next school term. I am hugely relieved.

Victor

CtrlSource wrote: »

He also announced savings of €45m in Overseas Development Aid in 2008. The Departments of Finance and Health and Children are to draw up a scheme to reduce surplus staff in the HSE as soon as possible."[/I]A bit disingenuous to call that a saving, isn't it? Its not like "O_o, we worked out how to do it cheaper". The are just doing less - its a cut.

eigrod wrote: »

Great. We can be safe in the knowledge then that our kids won't have to sit in damp, leaking & cold portakabins through next winter and that the school principals wont' be writing to us next September for money to fund various initiatives in the next school term. I am hugely relieved.

Let me be controversial, but the problems with our schools are as much to do with parents as funding.

Mr.Micro

Looking at the Tv over the last couple of weeks and seeing Cowan making excuses for the cuts and saying about having to cut the cloth to fit the economy blah. Pathetic, so thats it, no construction boom money for the moment and the incompetents in the government just whinge and make excuses. This country of ours has never been very good at handling the economy, mostly bust and bust and the a bit of boom and all the surplus squandered. Its the likes of the Taoiseach who is supposed to inspire optimism, what do we get a lame duck and his duckling . He was the big guy before the election and the cash was still rolling in. The honeymoon is over, Ahern got out just in time. Its not as if the Government was not warned that we were over dependent on the construction and the value of the dollar. Get your act together Mr.Cowan, people expect and deserve better. We are not going back to the bad old times.

The_Minister

:rolleyes:
Thats what the saving measures (or whatever you call them) are being introduced.
The gov is taking the harder route, and not merely borrowing to the hilt in order to fund current spending. That is what caused the bad old times, and they are avoiding that.

Liam Byrne

The biggest issue I have with this is that it highlights the waste and incompetence up to now.

- "we'll get rid of surplus staff" (why were they there in the first place ?)
- "we'll have to get value for money" (why didn't you look for value for money up to now?)
- "the tribunals are costing too much and going on too long" (yup, and we all know why - have a chat with LL, RB & BA and see if they can do anything to help this)

They're also VERY short on specifics of how.....but at least it's a start.

Maybe we're all guilty of wasting cash during the boom, but most of us were wasting our own.....

is_that_so

The_Minister wrote: »

:rolleyes:
Thats what the saving measures (or whatever you call them) are being introduced.
The gov is taking the harder route, and not merely borrowing to the hilt in order to fund current spending. That is what caused the bad old times, and they are avoiding that.

I disagree on this. That damage in a lot of ways came from the foolish largesse of the 1977 election which was lapped up by the electorate. We hadn't been doing too well up to that point either but it sent us careening over the edge.
Until the Tallaght Strategy of the late 80s we were just playing catch up. Remember also that spending cuts in the 1980s gutted the health service which took close to two decades to recover. Seeing as Health is in fact contributing the largest portion of those savings I'd be wary of attributing any genius to the current set of proposals, much of which is more likely to have come from the boffins in the Dept of Finance. They see numbers and find numbers that can be cut. The savings are fine and sensible for what they are but they are not necessarily the panacea some may make them out to be. A cut in the wrong direction, such as on training budgets or essential infrastructure and we could end up in an even worse spot.

Furthermore as I have already commented, this current crop have little experience of managing voter expectations in a downturn. There is also the challenge of ministers being capable of running their departments on lower budgets. Their ability to do so without an eye on re-election will be the real challenge. I can see very few of them who will say
"Look this is a tight spot at the moment and we're making spending cuts but we may need to borrow and we may even need to increase taxes so that we successfully ride this out. We'll do whatever is necessary to get it right". But I guess seeing as they will be blamed for buggering it up why would they?

eigrod

Liam Byrne wrote: »

- "the tribunals are costing too much and going on too long" (yup, and we all know why - have a chat with LL, RB & BA and see if they can do anything to help this)

might just prove a wee bit difficult, that.

Liam Byrne

eigrod wrote: »

might just prove a wee bit difficult, that.

Hmmmm....I know what you're saying, but I dunno.....it might actually be easier to get an answer out of him than to get one out of BA !!!!!

Liam Byrne

is_that_so wrote: »

I can see very few of them who will say "Look this is a tight spot at the moment and we're making spending cuts but we may need to borrow and we may even need to increase taxes so that we successfully ride this out. We'll do whatever is necessary to get it right". But I guess seeing as they will be blamed for buggering it up why would they?

Um, because that's what we're paying them to do ? Why the hell else should they keep their job ?

CtrlSource

eigrod wrote: »

might just prove a wee bit difficult, that.

Indeed.

The point about the tribunals is not that they weren't a good idea or necessary (which i believe they are), but the way in which they're now being conducted (Mahon, at least) means that the taxpayer is not getting a good return on the investment the Government has been putting into them.

As regards the downturn, i know we were warned about our over dependence on the construction boom in the past few years, but when you now look at the figures, it's still shocking to see the extent of it. Tax revenues from everything associated with it was fuelling so much of our growth

djpbarry

UCD_Econ wrote: »

This morning the Education minister announced that third level institutions must cuts payrolls by 3%. How already underfunded Universitys can cut payrolls is beyond me.

Are you serious? You are aware of the crazy money that get's thrown at people to lecture, supervise labs, etc. ?

Ernie Ball

djpbarry wrote: »

Are you serious? You are aware of the crazy money that get's thrown at administrators and vice-presidents who add almost nothing of value ?

I fixed that for you.

RDM_83

Ernie Ball, got there before me.
heard a figure of 120,000 for a departmental administrator in TCD a while back-thats more than senior lecturers
UCD also nicely break there own payscales apparently

djpbarry

Ernie Ball wrote: »

I fixed that for you.

RDM_83 wrote: »

heard a figure of 120,000 for a departmental administrator in TCD a while back-thats more than senior lecturers
UCD also nicely break there own payscales apparently

Absolutely - not going to argue with either of those; just picked one example.

spadder

Look at the savings here: God bless Noel dempsey for such vision.

http://www.rte.ie/news/2008/0709/voting.html