'WE CAN'T GO ON LIKE THIS' AN BORD SNIP NUA.. THE FALLOUT CONTINUES: Report boss defends cuts amid debt nightmare.

Byline: DEMELZA de BURCA

AN Bord Snip boss Colm McCarthy yesterday defended his slasher report and said: "We can't go on like this."

Mr McCarthy stood by his ruthless proposals to get Ireland out of its financial woes by targeting key areas such as health, education and social welfare to save EUR5.3billion.

The chairman of the Special Group on Public Service Numbers and Expenditure Programmes told RTE: "The background is the Government this year is borrowing nearly EUR400million a week in terribly difficult international debt markets.

"We have agreed with the EU commission that we'll try and eliminate this huge borrowing requirement on a three to fouryear time-span.

"We have to get the borrowing down and there's really only two ways in doing it.

"One is by increasing taxes further and the other is by controlling expenditure far better than we have been doing".

He added the Government, if it continues borrowing at the current level of EUR20billion per year, could find it difficult in the near future to secure loans.

The economist said: "Ultimately if we don't manage to do that there is a risk that the Government would find difficulty borrowing."

On social welfare, Mr McCarthy said current levels of spending must be addressed. The report said there is a "clear case" for a 5% cut in social welfare rates because of falling prices and pay cuts. This would save EUR850million a year, it said.

Mr McCarthy said: "We're not proposing to dismantle the welfare state or to bring the social welfare system back to where it was eight or 10 years ago.

"We are suggesting the Government consider bringing the real value of rates of payment back to where they were last summer when it finally dawned on people we were in a serious financial mess."

Meanwhile, Fine Gael's Leo Varadkar blasted the Government for not publishing the An Bord Snip Nua until the Dail recess.

He called for the Dail to be recalled to discuss its findings and the pending Commission on Taxation report.

Irish Business and Employers Confederation chief Danny McCoy warned the only solution to the current social welfare expenditure is to get people back to work.

Patricia King of union Siptu said people who have virtually nothing will have to pay for politicians' mistakes and insisted social welfare payments should not be cut.

Irish Mirror Comment: Page 10