Health reform at risk unless budget ‘realistic’, warns Varadkar

Minister for Health Leo Varadkar has warned his Cabinet colleagues key Coalition health reforms may be put at risk unless he is given a "realistic" spending allocation in next week's budget.

Mr Varadkar is seeking a neutral allocation for next year, equal to the total amount provided for 2014.

This would comprise the €13.7 billion given to the Department of Health in last year's budget, as well as a supplementary estimate "in excess" of €500 million to be provided in the coming weeks.

While declining to provide specifics, sources said the elements of Coalition health policy, such as free GP care for the under-sixes and the extension of the Breastcheck cancer programme, have yet to be implemented and could be at risk.

There is also a growing expectation across senior levels of Government that the three-year tax package to be announced by Minister for Finance Michael Noonan in tandem with the budget will feature substantial changes to the controversial and widely unpopular universal social charge (USC).

Spending plans

Ministers yesterday discussed the spending plans for the budget at their weekly Cabinet meeting, with another Cabinet meeting due to take place on Friday.

Sources said Mr Varadkar's intervention led to a heated discussion at Cabinet, with Minister for Public Expenditure and Reform Brendan Howlin raising objections.

The four-member Economic Management Council (EMC) – comprising the Taoiseach, Tánaiste, Mr Noonan and Mr Howlin – is also expected to meet on a number of occasions this week, and sources said the EMC discussed the tax package after Cabinet yesterday.

While the measures for 2015 are expected to be a combination of different tax elements, such as some changes to rates and bands, Ministers are expecting the three-year package, which will outline relief measures planned for 2015, 2016 and 2017, to substantially tackle the USC.

This would include changes to the rates, as well as possible adjustments to the bands, according to senior Coalition sources.

Nature of tax changes

One senior Minister said the plan will detail changes to the USC, but the “scale or the blend” of these changes is not yet know.

Another senior Minister said “there will be something in that direction”.

As recently as the Fine Gael parliamentary party think-in in Fota Island in Cork last month, TDs were "almost unanimous" that the USC should be abolished.