Ministers ‘furious’ at suggestion of tax cuts despite no money for 'key priorities'

Taoiseach Leo Varadkar’s suggestion of tax cuts in Tuesday week’s budget has left many of his own ministers “furious”, as they are being told there is no money for their pet projects.

Independent Alliance ministers and their teams have made it known at behind-the-scenes budget meetings that the Taoiseach’s suggestions are unacceptable.

With just eight days to go until Budget day, negotiations will reach their crescendo this week with the final tax receipts report being published, but there is mounting anger within the Government and with Fianna Fáil about the lack of progress being made.

With just €700m to play with, Finance Minister Paschal Donohoe’s hardline approach is angering many ministers, who have said that “this is our last chance to do something”, referencing the upcoming general election.

“The lads are being told by public expenditure that there is no money for their big asks, but yet they hear Leo talking about tax cuts,” said a senior Government source.

“For one, I know Finian McGrath is furious.

“How can you be talking about tax cuts, when we are being told there is no money for some of our key priorities? The ministers are not one bit happy.”

According to Fine Gael sources, Mr McGrath’s demand for €116m in additional respite and disability services are unlikely to be met, given Mr Donohoe’s hardline approach to spending.

The Irish Examiner has also learned:

• Mr Donohoe is prepared to divert €500m intended for his Rainy Day Fund to pay for Brexit-related supports;
• Fianna Fáil is not pushing for a €5 per week rise in welfare payments, despite Willie O’Dea’s pleas;
• Carbon Tax increases will be €6 per tonne which will raise about €130m, but mitigation factors will be in place to avoid fuel poverty;
• Mr Donohoe is to prioritise that there won’t be any cuts to services in 2020;
• Excise rates increases will be minimal as the Department of Finance believes they are at “point of diminishing returns” making further large increases redundant;
• Mr Donohoe plans to raise €77m by increasing the National Training Fund to 1% from January 1;
• Up to €100m in targeted Brexit supports will focus on the tourism, agri-food, fisheries, and SME sectors will also feature;
• Disability cuts from earlier this year are set to be reversed.

Justice Minister Charlie Flanagan has said mitigation measures will be included in the budget to ensure the burden of carbon tax rises does not fall unfairly to any particular group.

“We cannot have a situation in our country where one sector of the community is disproportionately affected,” Mr Flanagan said.

Former energy minister Denis Naughten has called for carbon tax not to be increased until 2023, in order to give people more time to make behavioural changes.

He said that the planned increases in the tax to €80 per tonne by 2030 would “disproportionately impact” upon rural Ireland.