‘Neutral’ budget to be signed off today after negotiations

The Government will sign off on the budget today after successful negotiations involving individual Ministers as well as a crucial Economic Management Council meeting yesterday evening.

According to reliable Government sources, the EMC agreed the substance of the major tax, revenue, excise and spending measures. The Council comprises Taoiseach Enda Kenny, Tánaiste Joan Burton, Minister for Finance Michael Noonan and Minister for Public Expenditure Brendan Howlin.

Separately, the series of bilateral meetings with five departments involving Mr Howlin also came to a successful conclusion last night. The talks with Minister for Health Leo Varadkar were thought to be particularly involved and have ended up with a budget plan for two years.

It is understood the budget for the department next year may exceed this year’s allocation of €13.7bn. A source said it will “reflect the total spending in 2014 which is the amount required to run the health services”.

Efficiencies

That was taken as a reference to this year’s €500 million overspend possibly being incorporated into next year’s provision, bringing the budget to more than €14 billion.

However, while the allocation may be increased there will be a strong onus on Mr Varadkar to find efficiencies and savings within his department to meet the costs associated with an ageing population as well as to fund promised new services.

The Department of Health will be given a two-year budget deal in an effort to ensure it can adhere to spending limits without the need for repeated financial bailouts.

No specific figures While declining to give specific figures, sources said Mr Varadkar will “not be out of pocket” for 2015 but had yet to finalise

funding levels for 2016.

Today’s meeting will start at 11am and will be briefed by Mr Noonan on the major tax proposals as well as by Mr Howlin, who will set out the agreed estimates for each department. Both Ministers will present Tuesday’s budget.

Last night Mr Kenny said: "I believe the 52 per cent tax rate introduced by the previous government is anti-employment and anti-enterprise.

“It undermines the incentive to work, to do over-time, to start a business. It makes it harder to attract home the 350,000 people who have left our shores because of the recession. Next week’s budget will be the first step of a multi-annual plan to reduce the 52 per cent rate on low and middle incomes.”

Meanwhile, Fianna Fáil will publish its pre-budget submission today, with its finance spokesman Michael McGrath taking the lead on its solution.

The overall adjustment proposed by the party is €220 million, and it is proposing €261 million in new tax measures, savings of €291 million as well as a €300 million windfall from reduced interest rate payments on our IMF loan.