Paschal Donohoe plans first balanced budget since crash

Finance Minister Paschal Donohoe has committed to delivering a balanced budget next year for the first time since the economic crash.

Finance Minister Paschal Donohoe has committed to delivering a balanced budget next year for the first time since the economic crash.

Mr Donohoe has also signalled that job creation is now so high that there may be problems filling positions in the coming years.

He said: “We could begin to experience capacity constraints within our labour market. If we were to get to that point in the future, this would be something that Government would have to reflect on and then engage with.”

The positive outlook came as the ESRI warned that a hard Brexit could result in a loss of up to €600m to the State between 2019 and 2021. It also cautioned that the tax take is down this year.

Mr Donohoe dismissed this report and insisted this year’s budget is on target.

Michael D’Arcy, the junior finance minister, pointed out that the ESRI had based its projections on a hard Brexit.

Mr Donohoe will be tasked with drafting all parts of Budget 2018 after being appointed to the Departments of Finance and Public Expenditure and Reform.

He said Budget 2018 will be “sensible and affordable” but would allow for capital investment. He announced he would be publishing a 10-year capital plan focused on getting best value for the taxpayer on a phased basis.

“The choices that we make will not be about the quantity of money that we spend on capital in our country,” he said. “It has to be about the quality of projects, it has to be about making sure that we are investing in projects that will help our economy grow better in the future.”

He said officials are looking at how to merge USC and PRSI, but this would happen over a number of budgets.

On the economy as a whole, Mr Donohoe said he expects 4.3% growth this year and annual growth in employment of 1.2%.

“We think it is feasible that we will move into 2018 and deliver a scenario of reaching an unemployment rate of approximately 5.5%,” he said.

“Clearly that would be an extraordinary achievement given all Irish citizens, companies, firms, and everybody who invested in Ireland has gone through, to find ourselves in a position to deliver that kind of participation rate in our labour market.”

Shorter term, Mr Donohoe said the Government aims to deliver a structural deficit of 0.5% in the next budget, which “would be equivalent to our country delivering a balanced budget”.

“I believe that delivering a balanced budget for our economy and our citizens next year is the foundation on which we will be able to build sustainable prosperity in the coming years.”


Lifestyle

We hear a lot about the geese, ducks and swans that arrive here from colder climes for the winter, but much less about smaller birds that come here to escape harsher conditions in northern Europe.Keep an eye out for redwings this winter

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