Hard Brexit could cost 40,000 jobs, Donohoe warns

Finance Minister Paschal Donohoe has warned that a hard Brexit could cost up to 40,000 jobs.

Publishing his mid-year expenditure report yesterday, Mr Donohoe said that while preparations for the worst-case scenario are underway, Ireland is still hoping that Irish negotiators can reach an agreement with Britain.

Referring to the review, he said: “The public finances are in good health and with more than 2.2m people at work, we will broadly balance the books this year.”

Only 14 out of 17 Government departments are “managing within their expenditure profiles” for the first half of the year.

Departments of Justice, Health, and Employment Affairs and Social Protection had all overrun their budgets by the end of June.

Health expenditure was just over 2%, or €300m, above its target and up nearly 9.5% in year-on-year terms.

“This indicates that managing Health expenditure for the rest of the year will be particularly challenging within the agreed 2018 allocation,” said Mr Donohoe.

“Therefore, taking into account the run rate on Health expenditure, a continuation at that rate would indicate the requirement for a Supplementary Estimate,” he said.

“The Government is prepared to consider the provision of additional resources this year.

“The provision of such additional resources to Health would need to be accompanied by increased levels of accountability in relation to expenditure by senior management in the HSE.”

A continuation of recruitment in line with the first five months would have cost more than €230m this year and a carryover cost of approximately €115m next year.

Justice spending was €42m or 3.5% above budget at the end of June, and largely related to the payment of garda overtime. The garda vote required a supplementary estimate in 2017, mainly driven by pay and overtime costs, that was partly offset by underspends elsewhere in the Justice area.

The Department of Employment Affairs and Social Protection was over budget by €5m but out of a total spend for the first half of the year of €10bn.

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