herald

Monday 23 October 2017

Noonan warning ministers about Budget cutbacks

FINANCE Minister Michael Noonan has cautioned fellow ministers against getting carried away by the package of cuts and taxes in the Budget being lower than expected.

Public Spending Minister Brendan Howlin said he is having to "manage the expectations" of his Cabinet colleagues, who are seeking to increase budgets, despite the need to reduce the country's debt levels.

The Government has accepted the Budget adjustment will be less than the projected €2bn.

But Mr Noonan warned ministers against assuming the Budget would be easy as a result. In a briefing to the Cabinet yesterday, he pointed out the tax take last year was high in the first half and tapered off towards the end.

The minister said nothing can be taken for granted on the figures for the second half of the year.

Mr Howlin said spending overall was on target this year, despite the overrun in Health.

The Cabinet agreed the deficit next year would still have to be less than 3pc of GDP. But a Government spokesman said the adjustment was likely to be less than €2bn.

"Today's memo outlined how developments since then have, on balance, been positive, and it is likely that the fiscal effort to achieve the Government's targets will be less than the €2bn previously projected.

"Fiscal policy for 2016 and 2017, including the expenditure ceilings, will be governed by the preventive arm of the EU's Stability and Growth Pact and the impact of these rules will become clearer in September," a Government spokesman said.

The date of the Budget was also agreed as October 14.

After overseeing three tough austerity budgets, Mr Howlin has said the major issue this year is dampening the hopes of other line departments who want spending increases.

Mr Howlin said that he asked each minister to come up with proposed cuts worth 5pc from their budgets - but none did so.

Ahead of the Budget, Mr Howlin - who has jokingly referred to himself as the Minister for Cuts - and his department have received spending submissions from other ministers.

hnews@herald.ie

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