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Brendan Howlin cuts call was "shot across the bow"

Michael Noonan plays down Minister for Public Expenditure’s demand for 20 per cent cut across Government departments.

Brendan Howlin, left, and Michael Noonan
Brendan Howlin, left, and Michael Noonan

BRENDAN HOWLIN’S CRITICISM of overspending in Government departments was simply “a shot across the bows”, said Finance Minister Michael Noonan.

Noonan defended the call of the Minister for Public Expenditure and Reform for cuts of 20 per cent across Government departments as the mark of a minister just  doing his job. Answering questions after his presentation on the state of the economy and public finances to an Oireachtas committee this morning, Noonan played down any strife within Cabinet on the issue.

Noonan also came under scrutiny from members of the committee on the high unemployment figures and the provision of credit to SMEs.

The Credit Review Office’s quarterly report, published this week, said the credit target of €3bn in SME loans from AIB and Bank of Ireland would not be met for 2010. The Small Firms’ Association and ISME both rejected that the reason the target would not be met was anything to do with the demand, or lack thereof, for loans. The SFA’s Patricia Callan had said that their association’s members had come to the conclusion that “there’s no point going near the banks” because they wouldn’t meet their strict criteria for lending.

Answering a question from Fianna Fáil’s Michael McGrath at the Oireachtas committee this morning, Noonan said that he couldn’t rely on “anecdotal” evidence from “interest groups” that supply of credit was the problem, and not the demand. He recommended that businesses go to the Credit Review Office if they want a review of a loan application. He also said Richard Bruton was looking at the contagion of the property collapse, which he said could have affected “small, decent family businesses” who might have thought the smart thing at the time was to invest their profits in property.

Sinn Féin’s Pearse Doherty focused on the growing unemployment figures and the “distress” being caused by the austerity measures planned for Ireland over the next number of years. He asked if the Government could give a deadline for any proposals to help with mortgage debt relief to be implemented. Michael Noonan reiterated that only 58 compulsory repossessions had come through the courts in the past 12 months and that a “free-for-all” debt forgiveness plan would be impossible. He said:

We have to make the distinction between ‘can’t pay’ and ‘won’t pay’.

He invited Doherty to submit his suggestions to the inter-departmental group looking at mortgage debt relief plans. The minister said that it’s not true that no action will be taken until the December Budget.

Noonan reiterated in answers to Joe Higgins later that it wasn’t “evil geniuses” in Europe who induced Irish people to invest in property. He and Socialist Party deputy Higgins clashed over the definition of the “working class” – and who in politics represented that group. Responding to Higgins’s criticism of the failure of “your system” of capitalism, Noonan said: “Who is working class anymore?” and said that “old-fashioned rhetoric” belonged in the archive at Dublin City Library. Noonan said:

Look at the votes. See who represents who in this country. Both parties have got more of what you call working-class votes than any of the left-wing parties. Talking about your exclusive representation of working classes – you don’t.

Read: Michael Noonan tells Oireachtas committee – ‘No magic bullet for mortgage debt relief’>

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