Saturday 1 October 2016

Donohoe - 'FF can't start making new budget demands'

Kevin Doyle and Robin Schiller

Published 11/08/2016 | 02:30

Mr Donohoe’s comments will come as reassurance to his Cabinet colleagues who privately expressed fears that they would be held to ransom in the coming week Photo: Gareth Chaney
Mr Donohoe’s comments will come as reassurance to his Cabinet colleagues who privately expressed fears that they would be held to ransom in the coming week Photo: Gareth Chaney

The Government will not be blackmailed by Fianna Fáil into unsafe spending increases against a backdrop of Brexit and an uncertain political climate in the United States, Public Expenditure Minister Paschal Donohoe has said.

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The minister has warned Micheál Martin's party not to bring forward any new red-line demands which fall outside the deal that allowed for the formation of a minority government.

Already Fianna Fáil TDs have indicated they want a €5 increase to the old age pension, the restoration of the lone parents' allowance and cheaper access to college for post-graduate students.

The emergence of a 'shopping list' before any real negotiations on the make-up of October's budget has sparked alarm among Fine Gael ministers who fear Mr Martin's party will exploit their 'confidence and supply' arrangement with Taoiseach Enda Kenny.

The bilateral deal wedded Fine Gael to a number of high-level commitments but mostly steered clear of specific figures for tax cuts and spending increases.

Mr Donohoe said himself and Finance Minister Michael Noonan are only in the "early stages" of putting the Budget document together but even in the past few weeks the backdrop has changed.

"The way we will be dealing with this and other things with Fianna Fáil in the coming weeks is to make a few things very clear," he said.

"This Budget is going to have to put together plans and take steps to protect our economy in the context of a world that is changing very quickly.

"We are aware of what is happening in the context of Brexit and the seismic consequence that will have for Ireland and the Irish economy.

"We are seeing the decision that will be made or could be made in the US later this year could have big consequences."

Speaking about Fianna Fáil, he added: "It is not appropriate that their support for this budget becomes conditional on items that are not included in the supply in confidence agreement."

Mr Donohoe's comments will come as reassurance to his Cabinet colleagues who privately expressed fears that they would be held to ransom in the coming weeks.

Read More: Analysis: Budget season - the first real test of 'new politics'

One minister had already pointed out that Willie O'Dea's demand for a €5 pension hike would immediately cost €150m from the estimated €650m available for new spending. Another minister claimed that Mr O'Dea had already breached the confidence and supply arrangement by making specific demands.

Mr Donohoe told the Irish Independent last night that Fine Gael will "honour" everything in the deal over the course of three budgets.

"We cannot end up in a situation where new proposals are put on the table that are outside the supply of confidence arrangement and they end up being pre-conditions for the Budget being passed.

"We have an agreement, we will deliver that agreement but it will take a number of years," he said, adding that this would "protect our country, protect our economy, protect everyone who is living with it".

Senior Fianna Fáil sources confirmed they intend to leverage their position to ensure that the budget "looks after the most vulnerable".

They said that as the "main party of Opposition" they would bring forward costed budget proposals.

The party's finance spokesmen Michael McGrath and Dara Calleary have already done some preparatory work on a pre-budget submission but it won't be finalised until a few days before the real event.

Mr O'Dea has said that his demand for a pension increase is "perfectly reasonable".

Irish Independent

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