Sunday 25 September 2016

Ministers told to 'stop codding themselves' over Budget spending

Published 17/09/2015 | 02:30

Enda Kenny: warning to his Cabinet colleagues
Enda Kenny: warning to his Cabinet colleagues
Tánaiste Joan Burton and Minister Joe Costello with Valerie Cummins (left) and Michael McDonagh at the official launch of the CrossCare Food Bank Distribution and Training Centre in, Glasnevin

Cabinet ministers have been warned to "stop codding themselves" when it comes to the amount of money available in the forthcoming Budget.

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At yesterday's Cabinet meeting, ministers were reminded of the "financial parameters" available for tax cuts and investment in services and told figures mentioned in public were not being said for the "sake of it".

Taoiseach Enda Kenny and Tánaiste Joan Burton, along with Finance Minister Michael Noonan and Public Expenditure Minister Brendan Howlin, issued the warning to Cabinet colleagues.

Mr Noonan spoke about taxation and highlighted the "financial flexibility" he has for reductions in tax.

The ministers were told to stop "codding themselves about what they are going to get", a senior Government source said.

Mr Noonan insisted that he will, at most, unveil a package of spending and tax cuts totalling €1.5bn when he announces the Budget on October 13.

Despite economic growth and better-than-expected exchequer returns, the Government is bound by strict European Union budget rules.

The funding available will be split 50/50 between tax cuts from Mr Noonan, which are likely to focus on the hated Universal Social Charge, and investment in public spending, to be announced by Mr Howlin.

A senior Department of Finance source yesterday said that the range of spending announced recently would cost more than €2.5bn - which is far outside the EU budget cap.

The source said the finance ministers wanted to "dampen expectations" among their Cabinet colleagues and make sure "realism sank in" ahead of the Budget.

"They want to make clear that while the €1.5bn package is welcome, it has its limits and once you talk about a massive number from Health then there is the Social Protection, Education and Justice demands - the money disappears quickly enough," the source said.

A Labour source said Mr Howlin wanted to send a "shot across the bows" of the Cabinet after a wave of budget announcements appeared in the media recently.

The soon-to-be announced capital spending plan was not discussed at Cabinet, but it was the sole issue on the table at the Economic Management Council, which also met yesterday.

The details of the plan were signed off by the Taoiseach, Tánaiste and the two finance ministers who also sit on the powerful Cabinet sub-committee.

It is expected a special Cabinet meeting will be convened to discuss the capital plan, which will be announced on two separate days next week.

A Government source warned there is potential for political fallout from the announcement as the plan did not reach as many parts of the country as expected.

"Some departments weren't happy and have been throwing their toys out of the pram - there will be people disappointed," the source said.

The source said the Government will be making a "virtue of the fact some things won't get done".

"There will be things that won't get done and we will have to deal with the political fallout," the source added.

Junior Health Minister Kathleen Lynch yesterday announced a €450m investment in nursing homes.

Irish Independent

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