Cabinet to hold special budget meeting on Sunday

Department of Health has still not produced figure

Minister for Health  James Reilly: If health overrun is larger than expected it will have a knock-on effect on other departments. Photograph: Alan Betson

Minister for Health James Reilly: If health overrun is larger than expected it will have a knock-on effect on other departments. Photograph: Alan Betson

Thu, Oct 10, 2013, 06:59

The Cabinet may have to hold a special meeting next Sunday afternoon to finalise the budget because of continuing delays in calculating the extent of health overspending in 2013.

The final meeting of the four-member Economic Management Council on the budget was scheduled to take place this morning but has been postponed until tomorrow, because the Department of Health has not yet produced a precise figure on its spending overrun for this year.


Bilateral talks
Bilateral meetings between the Department of Public Expenditure and the other big spending departments – Education, Social Protection and Justice – have all but finished but cannot formally conclude until the extent of the health overrun is known. If the amount is larger than anticipated, it will have a knock-on effect on other departments, which may be asked to make additional cuts to make up the health shortfall.

Ministers have been put on notice of a possible meeting on Sunday afternoon. The timing has been arranged for immediately after the Fine Gael national conference, which is taking place in Limerick this weekend.

The lowering of the overall adjustment from €3.1 billion to €2.5 billion will result in Minister for Finance Michael Noonan having to find no more than €300 million in new taxes this year, the lowest figure by some way since the crisis began in 2008.

The overall tax target for the budget was €1.1 billion but that figure has now been reduced to €900 million because of the smaller €2.5 billion overall target. However, two significant carry-overs will reduce the amount of next taxes required to €300 million. They are the full-year effect of the property tax (it was introduced in mid-year in July 2013, and 2014 will be the first year in which it is collected over 12 months). The second was top-slice tax adjustments affecting pensions of over €60,000. This was introduced in last year’s budget but will not come into effect until next year.

A Government source said that there would be no single big measures on the tax side but the target would be met by smaller adjustments to indirect taxes.