It’s the most wonderful time of the year – budget season

Just as Advent marks the official start of Christmas, so the National Economic Dialogue is the herald for the beginning of budget season.

Of course, in reality Christmas starts in the shops in September and the pre-Budget deliberations in Government – both public and private – kicked off weeks ago.

First came the indications that Ireland has €65 billion in surpluses coming down the tracks in the years up to 2026 and Minister for Finance Michael McGrath’s mooting of how much it could be used.

His officials are developing proposals for a new long-term reserve fund to help pay for the future costs of Ireland’s aging population – all very sensible.

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Then came the Irish Independent op-ed by three Fine Gael junior ministers calling for a tax break for middle income workers and the ensuing internal Coalition row over the suggestion.

There’s still four months to go until Budget day in October.

Monday’s National Economic Dialogue saw various stakeholder groups and representative bodies outlining their Budget 2024 demands.

It also saw a succession of the most senior Government Ministers line up in front of microphones to offer their views at this early stage.

As Jennifer Bray reports, Taoiseach Leo Varadkar warned that taking an overly cautious approach in the next budget could push people into poverty and be seen as a conscious decision to reduce citizens’ living standards.

While Mr McGrath and Minister for Public Expenditure Paschal Donohoe told reporters that the forthcoming budget would be “prudent”, Mr Varadkar said it is possible to balance all demands including increasing public spending, reducing income taxes, reducing the national debt and creating a savings fund.

Mr Varadkar said: “If the Government takes an overly cautious approach in dealing with the cost of living crisis and the climate crisis, it is making a conscious decision to reduce living standards and to do less,” he said. “And that’s not something we should stand over given our fiscal position. Having said that, we have never, nor will we, use temporary revenues to fund permanent or occurring day to day spending. We have to be careful not to do that.”

The Fine Gael leader once again said the budget will lift the point at which people pay the higher rate of tax and that there will be a “substantial welfare and pensions package”, although he indicated it would not be exactly similar to last year’s mix of €12 weekly payments and once-off lump sums.

Mr Varadkar said the Government is “very much aligned” on its goals for Budget 2024 but as Political Editor Pat Leahy points out in his analysis – Tánaiste Micheál Martin, Mr McGrath and Mr Donohoe stressed prudence a lot more than the Taoiseach.

He writes that the National Economic Dialogue might be a bit of a talking shop, but it has illustrated the budget divisions within Government clearly.

Next up in the budgetary process is the Summer Economic Statement which sets out the broad fiscal parameters the Government has to use on bugdet day.

Later in the summer the Tax Strategy Papers are published where Department of Finance officials set out the expected cost of various Budget day options.

If last summer is anything to go, we can expect more budget kites to be flown over the coming months as the Government grapples with what is a welcome headache – the dilemma of how to spend surpluses of the kind never before seen in this country.

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Playbook

The Cabinet meets this morning. See Jack Horgan-Jones’ tee-up story on today’s agenda – including how Government spending on housing was more than €80 million behind target in the first three months of 2023.

Proceedings in the Dáil start at 2pm with Leaders’ Questions.

Government business in the afternoon is the Public Health (Tobacco Products and Nicotine Inhaling Products) Bill 2023. This is the legislation that includes penalties for shops caught selling vaping products to people under 18.

A Sinn Féin motion on retained – or part-time – fire services will be debated from 5.30pm.

Minister for Rural and Community Development Heather Humphreys is due to take Parliamentary Questions from 7.30pm.

TDs will have an opportunity to raise Topical Issues from 9pm.

The Seanad will consider the Criminal Justice (Incitement to Violence or Hatred and Hate Offences) Bill 2022 from 5.30pm.

The Committee on the Environment will be discussing decarbonisation of the heat sector from 11am.

The first meeting of the Committee on Assisted Dying starts at 11am.

The Construction Industry Federation (CIF) is to warn the Committee on Housing that Ireland is entering “a much more difficult phase of housing provision” when it meets at 3pm.

The Committee on Children and Equality will look at the challenges facing women accessing education, leadership and political roles, also at 3pm.

Follow these links for the full Dáil, Seanad and Committee schedules.