Labour ministers tight-lipped on budget

Tánaiste says economic conditions more hopeful than at any time since beginning of recession

An Tánaiste and Labour Party leader Eamon Gilmore. Photographer: Dara Mac Dónaill/The Irish Times

An Tánaiste and Labour Party leader Eamon Gilmore. Photographer: Dara Mac Dónaill/The Irish Times

Tue, Apr 15, 2014, 10:07

Senior Labour ministers have said it is too early to make any determinations on the make-up of the next budget.

Dampening hopes for indications the budget will not be as severe as first predicted, Tánaiste Eamon Gilmore said this morning the Government will not be getting into the “nuts and bolts” of the budget until after the summer.

Mr Gilmore made his comments after it was reported the Department of Finance is seeking to ensure there will be no step back from the plan for €2 billion in tax rises and spending cutbacks in 2015 despite an improving economic outlook.

However, Mr Gilmore said economic conditions were looking “a bit more hopeful” than they have been “at any time since the beginning of the recession”.

“We have seen the ESRI report last week which is quite optimistic about the level of growth for the Irish economy and the figures that we may be dealing with then in September, he added.

His colleague, Minister for Public Expenditure and Reform Brendan Howlin, echoed his comments and added the Government has to be “prudent” in the next budget.

Speaking ahead of this morning’s weekly Cabinet meeting, Mr Howlin said: “We haven’t begun to sign off for next year’s budget. We have a medium term economic profile which we’re obliged to submit to Brussels but obviously we’re looking at data as it’s coming in all the time.”

Mr Howlin acknowledged the improvement in economic conditions but nonetheless would not give anything away about the make-up of the budget.

“The first quarter has been healthy as the ESRI has indicated. So tax takes for example are quarter of a billion higher than profiled. There are real signs that there is new economic activity and particularly on the jobs front more people being employed so it’ll be closer to October before we make final determinations in relation to next year’s budget.”

Mr Howlin said the Government is obliged under euro zone rules to submit its medium term economic forecasts to Brussels this month.

“They’re predicated on the budget decisions taken last year. In the profile we published last year we indicated that our budgetary arithmetic is based on a growth rate of 2 per cent this year and that would require an adjustment of two billion.

“The more recent data that’s been published in the last few days indicates that we might have better growth than that but obviously we have to be prudent, we have to set out what the data is until we have real data in terms of spending profiles and tax take closer to the budget deadline so as of now we’ll simply be profiling on the basis of the budget that we passed last year.”

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