| 11.9°C Dublin

EU decision on Irish Water is 'embarrassing', but won't affect my Budget - Noonan


Minister Michael Noonan

Minister Michael Noonan

Minister Michael Noonan

Finance Minister Michael Noonan has admitted the Eurostat ruling that Irish Water must stay on the Government books is "embarrassing" and "controversial".

But Mr Noonan argued the finding by the EU statistics service will not change his Budget plans to be unveiled in October.

However, opposition leaders brushed aside Mr Noonan's comments insisting that the EU decision will have a big impact on the Government's ability to buy the next election.

Speaking on Limerick's Live 95FM radio, Mr Noonan conceded the EU ruling was a "reverse".

"While the announcement is embarrassing, and is going to cause more controversy around Irish Water, in terms of the Budget position, it doesn't reduce my space to give modest extra spending increases through Brendan Howlin, and to give reasonable tax reductions on personal taxes. I still have the space of €1.2bn to €1.5bn," the minister said.

"Whether it's on balance sheet or off balance sheet, it's the same amount of money. All that's in question is how the spend is accounted for," he added.

Mr Noonan said the Government had already planned for the Eurostat ruling, which he described as a "prudent" decision.

"We have the same amount of money available in the Budget as we predicted in April. There's no difference there.

"Where the difference is, is that if they had made a decision to take it off balance sheet, our deficit would have been a bit lower at the end of the year. But we have predicted a deficit of 2.3pc and that stands, because we included Irish Water's spend on balance sheet and we have included it in the numbers right out to 2020.

"But that was at a time when Government finances weren't as good as they are now. Things have improved very rapidly over the last 18 months and this year, in tax terms, we're €1.4bn better than we thought we would be last October when I brought the Budget in," Mr Noonan added.

"There's going to be controversy, there's no doubt about that and the controversy has started already.

"But it doesn't change the necessity of having clean water in the country; it doesn't change the necessity to stop 17 towns pouring raw sewage into their local rivers and into their local harbour; and it doesn't stop some people getting water and lead pipes; it doesn't stop the problem of 40pc of the water leaking through the ground," he said.

Fianna Fail's public finance spokesman Sean Fleming said the Government had depended on an EU "Yes" to fund their plans.