Budget 2019 deals to be hammered out in coming days

Donohoe to hold meetings with FF to obtain assent for budget day package

 Minister for Finance  Paschal Donohoe: his meetings with his ministerial colleagues on the budget in recent weeks have been relatively straightforward. Photograph: Gareth Chaney Collins

Minister for Finance Paschal Donohoe: his meetings with his ministerial colleagues on the budget in recent weeks have been relatively straightforward. Photograph: Gareth Chaney Collins

 

With most spending plans for next year squared off with his Cabinet colleagues in recent weeks, the Minister for Finance Paschal Donohoe will hold a series of crucial meetings with the Minister for Housing and the Minister for Health this week as he seeks to finalise next week’s budget by the weekend.

Mr Donohoe is also scheduled to hold a number of meetings with Fianna Fáil – with finance spokesman Michael McGrath and public expenditure spokesman Barry Cowen – to obtain their assent for the budget day package.

While Fianna Fáil is committed to abstaining on the budget to allow it to pass the Dáil under the confidence and supply agreement, the party must first agree the details of the package. It has tabled proposals which would provide extra money for affordable housing developments and the national treatment purchase fund to reduce waiting lists – which it wants to claim as “wins” for the party and a justification for facilitating the budget’s passage.

While no agreement has been reached yet, and three meetings are provisionally scheduled for this week, sources on both sides expect a deal to be struck before the weekend.

Mr Donohoe’s meetings with his ministerial colleagues on the budget in recent weeks have been relatively straightforward. The budget process has been significantly de-dramatised (to coin a phrase) in recent years, as reforms to the budget-making process introduced in the wake of the financial crisis bed into the system.

What we know

We know that spending on capital (schools, hospitals, roads, equipment, etc) and current (pay, pensions, welfare) will be significantly increased, with demographic costs in health and education and the cost of future public sector pay increases already factored in.

We know that there will be a package of tax reductions directed at middle-income workers who pay the top rate of income tax on relatively modest salaries. We know there will be a package of welfare increases.

We know also that there will be a package of tax increases necessary to pay for other spending increases beyond the €3.5 billion budget day package that the Government settled on earlier this year.

Health and housing remain the final holdouts, with bilateral meetings between Mr Donohoe and his counterparts due in the coming days. Meantime, officials swap papers, projections, proposed deals and ultimatums.

The deadline for agreement is Friday; but everyone expects a long weekend.