Finance Minister Paschal Donohoe will have to guess whether Britain will crash out of the EU when he presents his budget on Tuesday, October 8, he has confirmed.
Mr Donohoe and his officials will next week publish the Government's Summer Economic Statement which will outline two different scenarios for the Budget – one if Britain seals a deal with the EU and one if it crashes out with a no deal.
But he has confirmed that the Budget will happen three weeks before the October 31 deadline and will have to estimate which scenario is most likely.
“We will have to form a judgement as to what to be the most likely scenario,” he told reporters in Dublin.
Mr Donohoe insisted that despite the “challenging policy scenario” in not knowing what will happen, he is not making plans to have an emergency budget after the Brexit deadline.
“I am not planning to bring out another budget,” he emphasised.
Mr Donohoe, in answering questions from the Irish Examiner confirmed that the Cabinet signed off to hold the Budget on Tuesday, October 8.
He said: “I will be ensuring we produce a budget which is in line with our commitments that we have with the European Union and the timings in line with every other budget that I have done. What I will be doing in the SES which I will be doing next week, will be outlining different economic scenarios against which Budget 2020 will be formed.”
“So we will be looking at the kind of economic scenario the country could face if we were to be in a deal scenario or a continuation of the status quo. What I will also be outlining is if a disorderly Brexit to occur, what then would the backdrop be for us in the preparation of a budget,” he said.
Mr Donohoe said the country finds itself in a challenging policy position because, on one hand, we have organisations such as IFAC (Irish Fiscal Advisory Council) warning of an inflationary risk within the economy and later on in the year we have the potential of a major deflation to occur were a disorderly Brexit to happen.
“For that reason, there will be two different scenarios set out in the Summer Economic Statement and Government will have to make a decision later in the year and I will make a recommendation as to what is the best scenario,” he said.
As of now, the Government will have just €600m to either increase spending or reduce taxes in October's budget once existing commitments are taken into account, the State's independent finance watchdog says.
According to IFAC, if the Government sticks to its plans, a total of €2.8bn in additional measures could be included in the budget, although €2.2bn of those are already accounted for.