Tuesday 16 January 2018

FG call for child benefit cut sparks Cabinet war

Burton under pressure to secure €440m savings at her department

Joan Burton
Joan Burton

DANIEL McCONNELL and JOHN DRENNAN

The Cabinet is ending the political term at war over Fine Gael demands that child benefit be cut again, but Labour's Joan Burton is insisting that no such cuts will be tolerated.

The Social Protection Minister told the Sunday Independent: "Child benefit is hugely important and neither I, nor the Tanaiste for that matter, expect there will be cuts."

However, it can also be revealed that officials in the Department of Public Expenditure believe that for a cuts target of €440m to be achieved Ms Burton will have to slash child benefit again.

Last week two Fine Gael ministers delivered a strong attack on what they claimed was Ms Burton's "failure" to deliver "reforms" in her department "despite much talk". In an apparent attempt to equate "cuts" with "reform", Fine Gael is demanding she makes the €440m in cuts on Budget day, as required by the Troika.

Fine Gael frustrations at the alleged lack of reform have boiled over with ministers strongly criticising Ms Burton's "constant commentary" about reform "without achieving anything".

"She must make the cuts, no question. Joan is a great woman for talking a good game, but what has she done?" one senior Fine Gael minister said.

Another Fine Gael minister said Ms Burton has "simply failed to deliver the reforms she promised", adding that this alleged failure was "sapping the Government of its authority".

"She has to make the cuts. It just wouldn't be fair to those working if she didn't. Where are the reforms?" the minister said.

But in return, Ms Burton has laid her political authority and that of Tanaiste Eamon Gilmore on the line and warned that there will be no cuts to child benefit in the next Budget. She had previously stated that she won't be able to meet the cuts target but is adamant that child benefit will not be cut.

Acknowledging the pressure she is under from her coalition partners, Ms Burton said: "Do Fine Gael or the two Finance Departments have different views? Almost certainly."

Defending her intention to retain the benefit at its current level, Ms Burton said: "For families mired in mortgage debt, child benefit not only keeps them above the surface but is also the only payment they receive from the State."

Ms Burton's strong stance on retaining the benefit is supported by her Labour colleagues, who see it "as a red line issue". She has said she expects to secure the bulk of savings from "the taxation of social welfare benefits''.

It has also emerged that Finance Minister Michael Noonan's department is "targeting pensions and pensioners" as part of the €440m in cuts that Ms Burton is expected to deliver this year – but she is also hostile to that idea. She said: "I have been doing a lot of heavy lifting, three-and-a-half billion euro worth, the well is running dry."

She said: "Fine Gael is looking at everything but as to whether the Taoiseach is an enthusiast for cuts to pensions, I have my doubts."

Within government, the main focus now is on the top-level discussions between Mr Noonan and Brendan Howlin on the breakdown of how the €3.1bn adjustment pencilled in for the Budget will be achieved. Fine Gael is insisting on a two-to-one split in favour of spending cuts while Labour is demanding a half-and-half approach.

The Sunday Independent has learned that officials within Mr Howlin's department are also adamant that the €440m target be met by Ms Burton, and are of the view that to achieve that target a cut in child benefit will be required.

It has also been established that the overall budgetary arithmetic being worked on with the Department of Public Expenditure and Reform at present is on the basis that the cuts target will be met, thus increasing the pressure on Ms Burton.

This position is likely to place a further strain on relations between Ms Burton and Mr Howlin.

But it can also be revealed that Mr Howlin's officials are also furious that the Department of Health is "already play acting" over the numbers with an increasing belief that another major overrun in Health Minister James Reilly's department is inevitable.

Irish Independent

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