Friday 21 October 2016

Ministers are to set three-year budgets for Brexit aftermath

Donohoe wants 'flexibility' to prepare for eventualities

Published 14/08/2016 | 02:30

Mr Donohoe said protecting the Irish economy from Brexit will be 'one of the key themes' of the budget. Pic Stephen Collins/Collins Photos
Mr Donohoe said protecting the Irish economy from Brexit will be 'one of the key themes' of the budget. Pic Stephen Collins/Collins Photos

Cabinet ministers have been told to prioritise their spending needs for the next three years as fears grow within Government over the impact of Brexit.

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Public Expenditure and Reform Minister Paschal Donohoe wrote to his cabinet colleagues last week telling them to set out their long-term investment demands to allow the Government to prepare for the fallout from the UK leaving the European Union (EU).

Speaking to the Sunday Independent, Mr Donohoe said he wants to make budget decisions that will make people's lives better but also warned that he also needs "flexibility" to protect Ireland from a future financial disaster.

News of conservative budgets will spark concern among Middle Ireland where hard-pressed families are hoping to reap the benefits of the recovering economy.

Rising health and car insurance premiums, coupled with the financial demands of sending children back to school, are to the front of ordinary families' minds as the summer ends in the coming weeks. While there will be some reprieve in October's budget, it is unlikely to meet the demands of a frustrated public.

Another senior cabinet minister warned that "Ireland is running to catch up" after a "lost decade" following the financial crash.

"Regardless of Brexit, there is a huge amount to be done to bring the country back to where you would like it to be and I think, in that sense, the giveaway Bertie budgets will be no more," the minister said.

Mr Donohoe said protecting the Irish economy from Brexit will be "one of the key themes" of the budget, along with implementing policies that "will support people and make their lives better".

"How we support our enterprise sector and how we support business in the context of Brexit is clearly something that will be important in spending and investment choices that the budget will make," he added.

It has also emerged that Fianna Fail has called for face-to-face meetings with Mr Donohoe and Finance Minister Michael Noonan as soon as the Dail returns in September.

The demand is the latest move in Fianna Fail's strategy to exert influence over the Government's budget from the Opposition benches.

Fianna Fail's public expenditure and reform spokesman, Dara Calleary, is seeking to speak to Mr Donohoe, while the party's finance spokesman, Michael McGrath, wants to meet with Mr Noonan.

Mr Donohoe said he is "willing to engage" with FF but warned that the party needs to "act responsibility" when it comes to budget negotiations. He said it is not financially possible to fulfil all the commitments set out in Fine Gael's confidence and supply agreement with Fianna Fail in the forthcoming budget.

Last week, the Sunday Independent revealed that Fianna Fail is planning to force Fine Gael to increase the old age pension by €5 a week and fully restore the controversial cut to the lone parent allowance.

Fianna Fail is demanding that these measures, along with radical reforms to the contributory state pension system, are enacted in the budget.

The party will also insist that college fees are not increased and, at the same time, call for an additional €100m a year to be added to the education budget to address funding shortfalls.

FF education spokesman Thomas Byrne said the funding crisis is "immediate and acute" and also said the party has a commitment in its election manifesto not to increase fees. Fianna Fail is also looking for post-graduate grants to be reintroduced next year.

Education Minister Richard Bruton has yet to say if he will increase fees in the budget. However, if Mr Bruton did increase fees, he will face a backlash from backbenchers.

FG Cork South West TD Jim Daly, who is on the Oireachtas Education Committee, said he would rather Government "grasp the nettle" and introduce real reforms instead of increasing funding by stealth through increased fees.

Dublin Rathdown TD Josepha Madigan also said increased fees should not be "imposed at this time on the youth".

Sunday Independent

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