Sunday 22 October 2017

Rivals split over future of finance department as battle hots up

Minister Simon Coveney. Photo: Frank McGrath
Minister Simon Coveney. Photo: Frank McGrath
Kevin Doyle

Kevin Doyle

A split has emerged between the frontrunners for the Fine Gael leadership on whether the Department of Public Expenditure should be axed.

The future of Paschal Donohoe's office has been called into question by Leo Varadkar, who believes it was only ever separated out from the Department of Finance for "coalition reasons".

However, Simon Coveney is "not convinced" on the idea of re-merging the two departments.

The diverging views could have a significant impact on the leadership race as both candidates vie for the public support of Mr Donohoe, who is widely tipped to replace Michael Noonan as finance minister.

Mr Donohoe has repeatedly stated he will not enter the contest to replace Enda Kenny as leader but has said he will publicly come out in favour of a candidate when the process is formally under way.

The Department of Finance was divided in two after the 2011 election in order to give a financial ministry to the Labour Party.

It was also seen as a sensible move given the scale of the economic crisis facing the Government.

However, Mr Varadkar said he was not aware of "any other countries where income and expenditure are in separate government departments".

He said there was an "eminent logic" in merging the two, adding: "If you look at any big organisation, there is one chief financial officer who has overall responsibility for both the income and expenditure.

"I think the departments were split really for coalition reasons to make sure that both Labour and Fine Gael would share that ministry essentially," he added.

However, Mr Coveney is far more cautious about the idea, saying the jobs of finance minister and public expenditure minister are "really quite separate".

"Certainly when the Department of Public Expenditure and Finance were separated it reflected an extreme financial management pressure that was there six years ago when we last went into government.

"Whether it's the right time to do it just yet, I am not sure, I don't think we should be doing it simply to free up a new place in the Cabinet.

"The key issue really is whether or not, in terms of what we need to achieve in the Programme for Government, whether or not we are best placed to do that with a minister for expenditure and reform and a separate minister for finance focusing on what they need to do."

The Housing Minister praised Mr Donohoe's work in the role, saying he has been "very successful at negotiating with the trade union movement, for example, around pay and pay expectations and I think that is going to be a big job in the next 12 months as well".

He added: "So I am not convinced that we should be merging the two just yet, but I have an open mind on it."

Mr Varadkar denied that he would be merging the two departments in order to free up space at the Cabinet, insisting it would be part of a bigger plan if he became leader. "I've done a lot of deep thinking about how we could transform the party and make it into a fighting force again, an election winning machine like it was in 2011 and also more importantly what the party can do if we remain in power over the next number of years," he said.

"Now we've a real opportunity. We've a country that's essentially at the crossroads.

"We've the risk of repeating the mistakes of the past or we can chart out a new future, a really exciting one for the country."

Taoiseach Enda Kenny has still not set a date for when he will step down, but Mr Coveney indicated he expected movement by the summer.

Irish Independent

Also in this section