Need for emergency budget could accelerate coalition talks

Fine Gael and Fianna Fáil believe the need for emergency laws and a crisis budget to respond to Covid-19 must be assured by a coalition deal and a new government.

The need for an emergency budget in just a few weeks was raised during Fine Gael’s teleconference last week by Finance Minister Paschal Donohoe.

The Attorney General, Oireachtas lawyers, and Seanad officials are also in talks examining whether the Upper House can be reconstituted without a new Taoiseach. This would determine if more emergency laws, when the old Seanad ceases to function, could go before the Upper House or not.

Both factors are now feeding into the talks between Fine Gael and Fianna Fáil, on top of responding to the virus pandemic.

There are provisional plans for Fine Gael and Fianna Fáil negotiators to meet on Wednesday for more talks. But crucially, Taoiseach Leo Varadkar did not get a mandate from a party meeting last week to negotiate a programme for government with rivals Fianna Fáil.

It is understood that Mr Donohoe discussed the need for emergency expenditure plans during the teleconference with TDs and senators.

Fine Gael TD Alan Farrell told the Irish Examiner that monetary allocations, collections, and incomes were running dry.

The Department of Health budget could run out very rapidly. Then you have less VAT, business rates, and revenue generated. There is a finite amount that could run out before the summer.

Some TDs privately say reallocating huge sums from other departments to health to fight the virus would necessitate major Dáil debate, currently banned to limit the spread of Covid-19.

The only way around this, especially with some estimates suggesting the virus response plans will cost upwards of €15bn, is for an emergency overhaul of the 2020 budget.

Fianna Fáil finance spokesman Michael McGrath also said at the weekend that a new government would be required soon because of huge decisions, including “the prospect of a budget well before October”.

But such a new budget, as well as any more emergency laws, would likely require the approval of both houses.

The outgoing Seanad will cease to function on Monday week when counting begins in the Seanad election.

There is debate among politicians and constitutional experts about whether the new Seanad can be reconstituted without the Taoiseach’s 11 nominees.

Without a new Taoiseach and government, those 11 members might not be decided and the Upper House could be left in abeyance.

A separate obstacle for the parties to overcome is trying to get the Green Party back on board in the talks, after they withdrew saying only a unity government should be agreed to battle Covid-19.

It has been suggested Mr Varadkar is open to the idea of a national government as long as it does not involve Sinn Féin. The Taoiseach’s spokesman did not answer queries.