The Cabinet has agreed budget measures which will include an extra 1,000 teachers next year and enough funds to help plug the financial shortfall in the health services.
Health Minister Leo Varadkar will get an extra €300m and further once-off payments to help meet a €500m shortfall in his budget. All the funds will form part of a two-year deal.
Education Minister Jan O’Sullivan will get extra funds in education which will allow her employ an extra 1,000 teachers.
However, there will be no changes to the teacher- pupil ratio in classrooms.
Government sources confirmed both funding situations last night after the Cabinet held its second last meeting ahead of spending and taxation measures being announced in the Dáil next Wednesday.
The Cabinet agreed estimates for each department for next year yesterday ahead of a final decision on tax reductions in the budget which will be signed off on next Tuesday.
Brendan Howlin, the public expenditure minister, yesterday said that there would be no spending cuts next year but he indicated that Ireland could not afford to be reckless in future spending.
Yesterday’s two-hour Cabinet meeting was described as agreeable and constructive by sources, so much so that no weekend meeting is needed unlike the lead up to last year’s tough budget.
A combination of reductions and changes to taxes on income have been agreed by the four-member Economic Management Council. These are understood to include changes to the Universal Social Charge. The tax changes are also expected to be part of a three-year package with staged reductions for workers.
But sources last night in government buildings also said that it was viewed that any significant changes to the Universal Social Charge could not be costly. On the other hand, some ministers are of the opinion that a straight cut to the top 41% tax rate is less expensive.
Taoiseach Enda Kenny has already announced that the tax changes will result in the creation of 15,000 additional jobs by 2018.
Mr Varadkar is understood to be satisfied that his budget will now “provide stability” in health services.
However, he is also expected to have to continue with reforms in services as part of a two-year deal for financing in health.
Tánaiste Joan Burton has already indicated that the budget will include a €20m package to help parents return to work where they can keep up to €30 in welfare payments.
A housing construction package will also be announced by the Fine Gael-Labour coalition.
No resumption of the Christmas bonus for welfare recipients is expected, despite recent reports.
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