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Bertie, do you think if I keep saying these cutbacks are for the best, eventually the public will believe me? McCREEVY WARNS: WORST STILL TO COME.


CHARLIE McCreevy defended the most drastic spending cuts since the 1980s yesterday and warned: The worst is yet to come.

The embattled Finance Minister looked a lonely figure as he tried to explain he was doing the right thing.

In the aftermath Black Thursday, when Mr McCreevy announced the cutbacks, he has been branded a liar and a cheat for deceiving the public about planned cuts.

Opposition parties and special interest groups continued their yesterday.

But Mr McCreevy said the cuts were "entirely necessary and prudent".

He added: "When times were bad years ago we said if we got economic success we would do all of these things and that's where the money has gone.

"Now, when the economic flow to the Exchequer and the resources that we are going to get are not going to be the same as in recent years, we have to get our spending in line with our income.

"It's not just going to be for this year, it's going to be for future years."

Mr McCreevy denied he and the government had lied to the electorate before the election.

He said they had almost doubled public spending in the last five years - mostly in health, education, social welfare, increases and pensions.

More than EUR36billion will be spent in capital and current spending next year but government departments will have to come to terms with curbing their spending.

And the minister vowed the Special Savings and Investment Account (SSIA) scheme will not be changed in any way next year.

Mr McCreevy said income tax would be down by EUR1.3billion this year, EUR600million of which was in corporation tax.

Only a "small amount" of the decrease in revenue was down to the SSIAs. Out of a workforce of 1.8million people, 1.2million are using of the scheme

He said: "The special savings scheme was a good idea when it was announced and it still is."

SSIAs are estimated to cost the Exchequer EUR500million per year, but this could rise to around EUR1billion if all the holders paid the full monthly contribution of EUR254.

Mr McCreevy also defended his decision to invest in the pension scheme instead of re-directing money into health, education and housing.

He said: "Putting the money into the national pension scheme is a long term investment in order to ensure that in 20 years time when the Irish demographic situation is more in tune with rest of Europe, that we will be able to provide for them."

The first-time buyers' grant was being abolished because "it is an inefficient use of resources" and it was "not up for negotiation".

He said it was brought in 25 years ago to prop up the ailing building industry and was now unnecessary.

Mr McCreevy said the Health Department has a budget of more than EUR9billion, up EUR6billion from when he was appointed Finance Minister in 1997.

He added: "If money was going to solve the health service, we would have solved it a long time ago."

But he admitted "there are structural changes needed within the health service to ensure effective delivery".


WHISPERING CAMPAIGN: Mr McCreevy and Bertie Ahern canvassing for election in <May when they vowed there would be no cutbacks
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Publication:The Mirror (London, England)
Date:Nov 16, 2002
Previous Article:FIREFIGHTERS ANGER AS WALKOUT ENDS DON'T PLAY WITH FIRE; Union's warn Blair as he pledges not to give in.

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