No 'goodies' in upcoming budgets, ministers warn as focus is on reducing 'borrowed money' 

Finance Minister Paschal Donohoe and Minister for Public Expenditure, Michael McGrath leave a Cabinet meeting at Dublin Castle. Picture: Niall Carson/PA Wire

The next two Budgets will need to focus on reducing "borrowed money" used to keep the economy afloat during the pandemic, the Minister for Finance has said.

Speaking to RTÉ radio’s Today with Claire Byrne show, Paschal Donohoe said all pandemic supports have come from “borrowed money” and this will need to be paid back.

"Given everything that we've been through over the last 18 months - it's a hell of a move from where we are now to begin to think about goodies in the budget," he said. 

"These are budgets, which for the next couple of years, will look at how we can reduce the emergency borrowing that we have had in place."

What's your view on this issue?

You can tell us here

The minister said the country has gone through a period in which, economically, the government has done "whatever it takes to" to put in place supports such as the wage subsidy scheme and pandemic unemployment payment, "but it's all borrowed money."

"We will need to reduce that borrowing, And we will begin that work in the approaching Budget."

Meanwhile, Minister for Public Expenditure Michael McGrath has said he does not think there will be a return to austerity despite the €38 billion deficit left by the Covid pandemic.

The economy would need “careful management” in the coming years, he told Newstalk Breakfast, but that did not “equate to pain” or another period of austerity.

“That would get us into trouble very quickly, but provided we are cautious and sensible, and we support the economic recovery we believe we can avoid anything like the kind of decisions that were made coming off the crisis a decade ago.”

Both ministers explained that the Pandemic Unemployment Payment (PUP) would be scaled back from next week, but that special supports would be put in place for specific sectors such as musicians for whom a return to work was not yet possible.

Mr McGrath said there would be a “bespoke scheme” for the arts culture and entertainment sector, to be announced next week.

“We have done all that we reasonably could be expected to do to accommodate people, but maintaining those levels of rates indefinitely is simply not an option for the economy or the public finances,” he said.