Budget complies with European rules, says Michael Noonan
He was responding to questions regarding the budget at RTE studios yesterday, including queries on the new first-time home buyers’ grant and the childcare package.
Mr Noonan brushed aside comments by the Irish Fiscal Advisory Council about the extra €1.3bn spend. The council says it may breach EU rules.
He said the budget “isn’t really” in breach of EU rules and the EU understands the arithmetic.
Council chairman Prof John McHale warned when the budget proposals are added to earlier spending plans, the total in spending and tax cuts for next year would come to €3bn over and above 2015.
Mr Noonan said the European Union has two rules: “one is an expenditure rule; the other is the progress” in terms of reducing the structural deficit.
“The two rules were compliant in the budget,” he told RTÉ’s Sean O’Rourke.
He also noted the advisory council’s mandate was to more or less question the Government’s actions.
“Under law, it is really the Irish Fiscal Council’s responsibility to not support the Government but to give a counter view, to pick out any flaws there might be in our analysis and that’s acceptable, they’re doing a good job.”
Public Expenditure Minister Paschal Donohoe suggested childcare costs may in fact “come down” following measures introduced in the budget.
A universal subsidy of up to €900 is being provided by for parents with children aged between six months and three years. Families who are means-tested and have older children may be entitled to larger amounts.
He denied the meas- ures would discriminate against stay-at-home mothers. Instead, state-funded childcare would allow a parent to decide whether to work.
Mr Noonan described how first-time buyers would receive the special grant for new homes after they put down their deposit on a property. He ruled out applying the grant to secondhand homes, arguing it would inflate prices.
He said currently there are no starter homes being built in Dublin.
The minister said the grant was directed at first-time buyers who find it difficult to put a deposit together and he was sure the building industry would respond with the construction of more three-bed family homes.
Mr Noonan also yesterday gave his backing to colleague Mr Donohue to be a future leader of Fine Gael.
Asked if he thought Mr Donohoe could one day succeed Enda Kenny, the finance minister replied his colleague had “all the qualities” of a future leader.
Elsewhere, Mr Donohoe defended the salary increases for politicians which were agreed as part of pay restoration plans for all public and civil servants.
TDs are in line for a pay rise of €2,700 next year and again in 2018 while welfare benefits including the dole, pensions and carers’ and disability allowance are only going up by €5, but not before March 1.
“Everything is now tied in to how we treat public and civil servants. There’s the issue in relation to ministerial salaries that we will revisit because I don’t want to be in a situation where people feel in the future that there’s any kind of unfairness going on,” he said.
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