The Government will formally agree the start to the budget process this week as pressure mounts to bring forward talks on extending the confidence and supply deal with Fianna Fáil.
Junior finance minister Michael D’Arcy said the country is heading into a “rocky” period and needs a legitimate Government in the coming months with Brexit looming. In that context, negotiations to extend the support pact with Fianna Fáil should begin over the summer, he said.
“That is a question for Fianna Fáil,” he said. “And we’ll see whether Fianna Fáil put the country first.”
The Cabinet this week will agree the budget date and steps involved in framing a third and final year of spending and tax agreements with Fianna Fáil. It will agree to hold the budget on October 9, in line with the EU semester process. It will also be agreed that the summer economic statement will be brought to Cabinet on June 19. This will lay out the amount of money available and economic consequences of different levels of spending and taxation.
Finance Minister Paschal Donohoe has played down expectations of this third and final budget deal with Fianna Fáil, despite demands to fund cash-starved services. He said €2.6bn of the €3.2bn in additional spending for next year has already been set aside for matters such as public sector pay and demographic-related costs.
Cabinet this week will also agree that the mid-year expenditure report will be published in July, as will tax strategy group papers, both which feed into the budget. Ministers will also be told the National Economic Dialogue will take place on June 27 and 28.
Fianna Fáil wants to wait until after the budget before any talks on extending the confidence and supply deal. This could be December or January by the time all parts pass in the Dáil.
However, Mr D’Arcy said this is too risky, especially amid efforts to pass legislation giving effect to the abortion legislation, the need to pass the budget itself, and with Brexit looming.
“Nine months from now, we are in Brexit,” said Mr D’Arcy. “And there is an incredible amount of uncertainty. And one thing we must have is a stable government. That is an absolute must. People are going to ask the hard questions and Fianna Fáil will have to consider the matter carefully.
“Fianna Fáil say it is a matter for October. The referendum result and the prospect of everything falling if there is an election called complicates that. If anything, maybe Fianna Fáil might move that timeframe up or Fine Gael.”
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