State looks to pay down debt in budget

Taoiseach Leo Varadkar has said the Government will not spend all of the €3.2bn available to it in October’s budget, but will instead pay down the national debt.

He said the Government is seeking to avoid the mistakes of the past, and to cut debt.

Finance Minister Paschal Donohoe will today bring a summer economic statement to Cabinet for approval which will set out the main parameters of the budget.

Mr Varadkar said: “The general principle we will be applying is that no matter what the fiscal rules may be, it is just common sense and good house keeping that next year we’d keep reducing the deficit and not increase borrowing.

“Because at the current stage in our economic cycle, more borrowing and a bigger deficit and a bigger debt does not make sense. We don’t want to repeat the mistakes of the past.”

Asked is the total envelope of spending still at the €3.2bn level, he said it is, but issued a heavy caveat on it.

It is yeah, in that ball park but a lot of it is already committed as you know,” he said in response to questions from the Irish Examiner.

Fianna Fail’s finance spokesman, Michael McGrath, said he wants to see prudent management at the heart of the budget policy, but urged Mr Donohoe to prioritise health and housing, as well as helping small businesses in his plans.

“The Government has failed in these areas and we really need to see a re-focus on them to help the domestic economy,” he told the Irish Examiner.

Mr Varadkar was speaking as he opened Amazon Web Services Dublin headquarters, at which it was announced the company will create a further 1,000 jobs in the next two years.