Kenny: No giveaway budget in October

There will be no giveaway budget in October, Taoiseach Enda Kenny has said. Any spending plans ahead would be slow and measured, he said.

Mr Kenny said the budget would be geared towards eliminating Ireland’s deficit and debt further.

His comments contrast to Tánaiste Joan Burton’s, who last night told a dinner in Boston that Ireland should be allowed to spend surplus funds rather than pay off debt.

She told the Boston College event that Ireland should be allowed to spend funds on jobs, infrastructure, education, and tax cuts rather than on debt, as required under European Commission rules.

Speaking in Washington, Mr Kenny confirmed the Coalition is in the middle of talks with Brussels, known as the European semester process, on the next budget. This involves an oversight of a country’s spending and reforms for the year.

Asked by the Irish Examiner about Ms Burton’s speech and the Coalition’s next budget, he answered: “And what we want to do for the future is eliminate our deficit, continue to provide employment opportunities for people, continue to have strong investment confidence in the country and build up reserves in the event of any shocks occurring that we can deal with those.

“So let me be clear, the budget in October is not going to be one where there’s a whole series of giveaways. We don’t have the capacity to do that. It will be slow and measured in terms of the progress we’ve made, with a very clear understanding that we are not going back to the days of what caused the problem, boom and bust politics.”

While Fine Gael and Labour have agreed a desire to reduce income taxes further in the budget, the latter wants a second free pre-school year and a rise in the minimum wage.

Mr Kenny will attend a leaders’ summit in Brussels on Friday, where some discussion is expected on the recent flexibility given to France to meet its EU deficit targets.

Mr Kenny’s comments in Washington suggest that, as Ireland prepares to submit spending targets to European authorities, that a more conservative budget than previously flagged may be announced in October.

Meanwhile, Mr Kenny yesterday welcomed a decision by Ryanair’s board to launch cheap transatlantic routes between Europe and the US, for possibly €14 a flight. Asked about how this might affect Aer Lingus, where the State has a 25% share in, he said: “The more connectivity we have with America the greater the opportunity for people to come both ways.”