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One week until Budget Day and all eyes are on Paschal Donohoe and Michael McGrath

Inside Politics: Despite the vast sums to be expended, the room for new recurring spending is actually quite tight

There will be rows and brinksmanship as Minister for Public Expenditure and Reform Michael McGrath and Minister for Finance Paschal Donohoe hold meetings in advance of the Budget – but a deal will be done. Photograph: Nick Bradshaw

Pat Leahy's face
Pat Leahy
Tue Sep 20 2022 - 08:02

It’s one week until Budget Day and all the focus around Government will be on the package to be delivered by Minister for Finance Paschal Donohoe and Minister for Public Expenditure Michael McGrath in the Dáil this day week.

The key decision-making meetings are continuing all week at Government Buildings; last night, the three Coalition party leaders and the two budget ministers hunkered down again for another session, while the “budget bilaterals” – where McGrath meets the teams from the spending departments to hammer out a settlement – will be completed in the coming days. Social Protection, the largest-spending department, is due in this evening. Pass by on Merrion Street any night this week and the lights will be on. There will be rows, ultimatums, possibly a walkout or two, lots of brinkmanship – and then finally the deal will be done. How do we know? Because it always is. A Government hasn’t fallen on a Budget since 1982 and this one won’t.

That’s not to say that it will be easy. It has started to dawn on people in recent days that despite the vast sums which will be expended between the Budget and the cost of living package to be announced on the same day, the room for new, annually recurring spending commitments is actually quite tight – about €1.3 billion when all the other spending measures are taken into account. Across all of Government, that is not an enormous sum. What it means in practice is that the social welfare package in the budget – ie increases to the weekly rates – will be restricted and is unlikely to hit the €15 increase that many groups are seeking, though there will be once-off social welfare giveaways, perhaps including a double payment of many benefits.

Our lead story this morning reports the latest on budgetary comings and goings, and also has the jump on the big pension age decision. This has been flagged over the summer by the party leaders and various ministers, but Heather Humphreys will finally bring it forward for Cabinet approval this morning. No rise in the pension age, as expected, with PRSI increases to pay for this to be worked out in the future.

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Also this morning, there’s a take on the fallout from the recent imbroglio over Paschal Donohoe’s future as head of the Eurogroup, the group of EU finance ministers whose countries use the single currency. This has been a subject of some considerable friction over the past week.

The relationship between Donohoe and McGrath has been the strongest pillar of the Coalition, and is substantially more trusting than the one between their respective leaders. It remains to be seen if it is damaged by the controversy. If so, it will make finalising a budget more difficult.

Political columnist Gerard Howlin has some caustic words for Varadkar

Harry McGee reports on page one that the Government’s energy review published yesterday has not overcome differences between the Green Party and Fine Gael/Fianna Fáil about how and where to store gas. Some FF and FG TDs favour a plan to build a liquefied natural gas terminal on the Shannon estuary. The Greens are opposed.

All this will be relatively low-key until there’s a gas shortage. Then watch it blow up. Harry’s analysis piece says that gas may be part of the solution to Ireland’s energy problems – but it’s also part of the problem

The National Ploughing Championships get under way in Co Laois, and politicians from all parties will be obliged to make the pilgrimage at some stage this week. The Taoiseach is due tomorrow. It’s a hectic week or so for Micheál Martin – after flying back from Queen Elizabeth’s funeral (and his meeting Liz Truss) he was straight into Budget negotiations. He’s going to New York on Thursday for the United National General Assembly and then there’s the Budget next Tuesday. Followed by the Fianna Fáil Ard Fheis on Friday week. We’ll do our best to keep up.

Finally there’s acres of coverage across all the paper of the queen’s funeral yesterday. That was a big funeral, as they say. Keith Duggan’s page one report here. 

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Fintan O’Toole says: Up the Republic 

More advances for Ukraine in the war against Russia

Fiona Reddan on the current structure of the personal tax system and the options for change on Budget Day

After more than a week of blanket coverage every day, the British papers gear up for one final effort: the BBC has them all here 

The tone can be summarised by one Telegraph columnist: “We are the envy of the world”. Quite. Meanwhile, look at the Daily Mail’s online edition, and they’re moving on to the next episode in the soap opera: Can Charles heal the rift with Harry and Megan? Spoiler alert: no.

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The Cabinet meets this morning, followed by a press conference where Heather Humphreys will announce her pension reforms.

The Dáil meets at 2pm for Leaders’ Questions, followed by Taoiseach’s departmental questions and then Government legislation, including the Online Safety and Media Regulation Bill. Sinn Féin has a motion about the national retrofitting plan and then Eamon Ryan has his departmental questions at 7.30pm. Topical issues at 9pm and adjournment before 10pm.

Dublin MEPs are in the Seanad, while there’s a very busy day at the committees, including the Commission for the Regulation of Utilities at the Environment Committee, the Housing Committee will have a discussion on the rental sector while Minister for Education Norma Foley is at the Committee on Disability Matters to speak about aligning the education system with the UN Convention of the Rights of People with Disabilities.

There’s a full schedule of all Oireachtas business here: www.oireachtas.ie

Michael D Higgins will be at the ploughing championships in the presidential wellies. We’ll keep an eye on him, and everything else.