No provision made for possible end of water charges or refunds
A €200m black hole could emerge in next year's Budget if water charges are abolished.
Tomorrow's Budget will make no allowance for the possibility that water charges might not be reintroduced once the current suspension period ends in May.
The Dáil agreed to suspend bills for nine months while an expert commission reviews the charges introduced by the last government.
It is due to report back to the Dáil by the end of November at which time an Oireachtas committee will study its findings before the question of water charges it put to TDs again.
However, with Fianna Fáil now saying it favours using general taxation to fund water infrastructure it seems certain that domestic water bills will not return.
Despite this, the Irish Independent understands that Budget 2017 makes no provision for taxation being diverted to Irish Water to make-up the subsequent shortfall.
This is likely to create a headache for Housing Minister Simon Coveney's department as he is now responsible for Irish Water.
A Department of Finance White Paper published on Saturday showed that the Government has planned to invest €270m in infrastructure next year.
A source said: "That figure was always earmarked for capital expenditure.
"It would be given to Irish Water regardless of the situation with charges. If charges don't return, the gap will have to be filled somehow."
Fianna Fáil has also indicated that it would like to give a refund to households who have paid their bill, at an estimated cost of €50m.
This is unlikely to happen in 2017 either as the money would have to be taken from other services.
Fianna Fáil says that it has legal advice showing charges can be abolished without breaching a European Union water framework directive.
However, last week the EU Environment Commissioner, Karmenu Vella, in his first comment on the workings of the Expert Commission, said he expected "a robust water-funding" regime, which respects rules set down by the EU.