Once-off measures in the budget to deal with cost-of-living pressures will be less than last year, ministers indicated on Tuesday, as expert warnings mount that a big giveaway on budget day would push inflation up.
In a co-ordinated move, both the Minister for Finance Michael McGrath and the Minister for Public Expenditure Paschal Donohoe sought to dampen expectations about the scale of the giveaways, with Mr McGrath indicating that additional one-off measures would not meet the €4.1 billion figure in last year’s Budget.
It was, senior officials acknowledged, a message intended as much for their Cabinet colleagues as for the public.
The two budget ministers face pressure from colleagues to increase spending, while experts continue to warn about the dangers of stoking inflation.
“There will be help for people,” Mr McGrath said. “We’ll do the very best we can ... but we won’t be able meet all of the demands that are there. The advice from the Central Bank in relation to fiscal policy and the need to avoid stoking inflation ... is one that we need to be very conscious of in the decisions we make on budget day.”
He said that “when it comes to temporary one-off measures in the budget they should not be on a scale comparable with last year. There will be a package of measures on budget day but in the round I do think it should be on a lesser scale to the budget last year.” He also indicated that most of the giveaways would be paid this year.
The State’s independent budgetary watchdog, the Irish Fiscal Advisory Council, will on Wednesday renew its warnings that the upcoming budgetary package has the potential to “destabilise the economy” and fuel further price increases.
In its opening statement in advance of an appearance at the Oireachtas Budgetary Oversight Committee, IFAC says the Coalition’s revised spending plans, outlined in its recent Summer Economic Statement (SES), would see the national spending rule “repeatedly breached” every year out to 2026.
“As a result, core net spending is expected to be €4 billion higher by 2026 compared to plans set out five months ago. The breaches are serious,” IFAC members will tell the committee.
But speaking in New York, where he is attending the UN general assembly, Taoiseach Leo Varadkar suggested that expert advice was just one factor the government would take into account
He said the Government listened to experts in all fields and from all walks of life but it was running a society and not just an economy.
Bilateral meetings between the Department of Public Expenditure and spending departments will begin next week, it is understood. But Ministers have been pushing for budget increases for months.
Minister for Children Roderic O’Gorman will tell an Oireachtas committee on Wednesday that he intends to seek an increase to the foster care allowance as part of Budget 2024, describing it as a “priority.” The foster carer allowance of between €325 and €352 a week has not been increased since 2009, despite repeated complaints of carers quitting as a result of financial pressures.
Mr O’Gorman will appear before the Oireachtas Committee on Children and pledge to prioritise an increase as part of ongoing Budget discussions. It comes as referral rates to Tusla continue to increase year on year.
Also on Wednesday, the Minister for Social Protection, Heather Humphreys, will publish a green paper detailing proposed changes to welfare payments for disabled people, which would see the two current allowances integrated into a single, three-tiered payment, to be renamed a personal support payment.
