The Government will have up to €1.5 billion extra to spend on budget day on childcare, social welfare and new roads, following the publication yesterday of the 2006 Estimates, writes Mark Hennessy, Political Correspondent
State spending will rise next year by €3 billion, or 7 per cent, to about €48 billion, including a 9 per cent increase in the health budget and 7 per cent in the spending of the Department of Justice, Equality and Law Reform.
Producing the Estimates, the Minister for Finance Brian Cowen emphasised that extra budget day spending would be centred on social welfare increases, improving the care for the elderly and on infrastructure.
The Government would also improve childcare services, although on the latter he warned that "there is no magic wand that will sort this out" and working parents and stay-at-home parents would have to be treated equally.
Though the Health Service Executive spending will rise by 6 per cent to €12 billion, the Minister said that another €400 million would have to be found to begin making payments to OAPs illegally charged nursing home bills.
Asked how much the nursing homes controversy could eventually cost: "I don't know is the honest answer. The Tánaiste pencilled in an indicative figure of €400 million for next year. Whatever needs to be paid will have to be paid."
The Minister is likely to try and keep the overall rise in State spending next year to approximately 9 per cent, given his repeated declarations yesterday that the Government would be "prudent" in its management of the economy.
Seeking to downplay budget expectations, Mr Cowen said the scope for additional spending on December 7th "will be limited" bearing "in mind the scale of the funds that I am allocating".
However, the Minister will have to find extra money in the second half of next year to meet the public pay bill since he has currently made no allowance for pay rises due under a successor to the Programme for Sustaining Progress.
Meanwhile, Mr Cowen has finally admitted that the Government's promise to add 2,000 extra gardaí will not be kept during the lifetime of the Government, but rather would not happen until early 2008.
Bizarrely, however, the Minister for Justice, Equality and Law Reform, Michael McDowell disagreed with his Cabinet colleague and claimed that the promised recruitment is "fully on schedule".
Including both serving gardaí and those still in training, Mr McDowell said the 14,000 target for the size of the force would be beaten next year.
However the Minister's figures to not take account of Garda retirement.
Two hundred extra teachers will be recruited next year, while Mr Cowen committed the Government to cutting the pupil/teacher ratio by one next year, and by one more in the following year.
Given the poor welcome given to the Government's Transport 21 plan, Mr Cowen may emphasise transport infrastructure when he announces the new five-year capital budget for 2006/2010 on budget day.
The National Purchase Treatment Fund, which is used to get patients off public waiting-lists, is to be able to carry out an extra 3,500 operations next year, due to a €13 million budget increase.
The Government will have to move to widen the standard rate tax band, given the increasing numbers of people now paying top-rate tax, as was conceded by Taoiseach Bertie Ahern in the Dáil on Wednesday.
Keeping the threshold in line with inflation alone will cost €200 million, though the Irish Congress of Trade Unions have sought a €360 million move.
Insisting that the Government will get value for money, the Minister said he was "absolutely determined" that "every euro of the taxpayers' money must be well spent".