Monday 5 December 2016

Ministers seek over €3bn in new spending measures ahead of Budget

Cormac McQuinn Political Correspondent

Published 14/09/2016 | 21:57

Photo credit: Julien Behal/PA Wire
Photo credit: Julien Behal/PA Wire

Ministers have sought more than €3bn in new spending measures ahead of the Budget, more than three times the available 'fiscal space' for next year.

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Cabinet ministers are to be told to pare back their expectations given that the so-called fiscal space for Budget 2017 has been put at around €1bn, with as much of a third of this to be used for tax cuts.

Fine Gael have committed to at least a 2:1 split between expenditure and tax cuts under its confidence and supply agreement with Fianna Fáil.

Amid stiff competition between Departments for funding  areas like housing, health and education, the combined 'wish-lists' of ministers has come in at in excess of €3bn.

A government spokesman said: “We’ve been consistently communicating for the last week or two that there is a very finite amount of resources available to the government.

"The flexibility in spending isn’t what people would like it to be."

The spokesman pointed out that Taoiseach Enda Kenny has said that the Budget will have to be "Brexit proofed" to take into account the economic impact of Britain beginning the process of leaving the European Union.

Public Expenditure Minister Paschal Donohoe is to meet his Cabinet colleagues over the coming weeks to discuss individual Departments' spending needs.

Last week Mr Kenny delivered a speech to the British-Irish Chamber of Commerce outlining how he has asked Finance Minister Michael Noonan and Mr Donohoe to ensure that the Budget is "Brexit-proofed".

He said: "In the weeks ahead there will be intense political and parliamentary debate about the best use of the limited resources."

Mr Kenny added: "Not all good suggestions will be affordable in the next 12 months but with continued economic recovery we will, in turn, be able to continue to deliver for hard pressed families."

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