'Public services budget just €42bn'

The Government will have to run the country's public services with just €42bn in 2009, projected figures showed today.

Most departments have had their funding slashed in the Department of Finance’s Estimates which Finance Minister Brian Lenihan will use to frame next week’s Budget.

Public spending is set to increase by just 2.5% to €42bn in 2009 and the Government will have to borrow heavily to compensate for dwindling tax revenue.

The growing dole queues mean the Department of Social and Family Affairs has been given an extra €600m in 2009.

The Department of Education and Science gets an additional €225m while the Health Service Executive also received a funding increase of €180m to €12bn.

Department of Finance officials reiterated that total revenue for 2008 will be €42.4bn, about €6.5bn less than forecast earlier this year.

Commenting on the Estimates, the Labour Party said the figures outlined a remarkable deterioration in the country’s economic situation in just 12 months.

“The fall in the fortunes of the Irish economy as reflected in these figures is the most rapid and severe in the history of the state,” said finance spokeswoman Joan Burton.

She added: “The recession has been made worse by the international credit crunch. But let us be absolutely clear: Ireland is suffering hard and deep because our recession has its origin firmly in the house-price bubble which Fianna Fáil stoked, mishandled and refused to dampen.

“It is no accident that Ireland is the first of the Euro-zone economies to go into recession.”

Labour said the Budget on Tuesday must protect jobs and promote growth.

The Government is obliged under the Constitution to publish the Estimates on the eve of the Budget every year.

The data may not be as accurate as previous years because the Budget has been brought forward by almost two months to address the deteriorating economic situation.

A Department of Finance spokeswoman said: “The figures are projected and reflect present knowledge. They are subject to revision when the end-year figures become available in early January.”

Fine Gael blamed unsustainable Government spending during the Celtic Tiger boom years for the projected €13.3bn deficit for 2009.

Finance spokesman Richard Bruton urged Mr Lenihan not to cut investment or raise taxes in the Budget.

“We must focus on long-overdue reforms to stamp out waste, to rationalise overblown administrative structure and to protect frontline services.”

“Vulnerable sections of our community must not become the fall guy for years of Fianna Fail’s complacent management of public money."

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