Michael McGrath rules out Budget day splurge despite €7bn fall in deficit 

Michael McGrath: 'If we can reduce the deficit faster and faster, and add less money to the national debt, that's not a bad thing'

Minister for Public Expenditure and Reform, Michael McGrath. Picture: Leah Farrell / RollingNews.ie

Tuesday’s Budget Day package of new spending will remain at €4.7bn, despite this year’s deficit being €13bn and not €20bn as previously thought.

Ruling out any last-minute “splurge” Public Expenditure Minister Michael McGrath said he and Finance Minister Paschal Donohoe are “really satisfied” that the Budget Day package as outlined is the correct one.

“We are really satisfied that the overall package of €4.7 billion will allow us to make really significant progress in housing and health care, in childcare, in tackling climate action, and addressing the very real cost of living pressures that people are facing at this time,” he said.

He said the easiest thing for Mr Donohoe and himself to do would be to say "we're now going to go on a splurge, and we're going to spend that improved deficit outturn."

“But it's still a deficit of over €13 billion, and if we can reduce the deficit faster and faster, and add less money to the national debt, that's not a bad thing. We have to think of our children, we have to think of our future generations,” Mr McGrath said.

“I very much welcome the really significant improvements in the projected deficit for this year, a change of €7 billion in a short number of months is quite dramatic. 

"The deficit as forecast now in the white paper is just over €13 billion versus a figure of over €20 billion in the summer economic statement. And I think that is because the economy has rebounded very strongly,” he said.

Meanwhile, a paper published by Fine Gael has suggested that Sinn Féin’s alternative budget “fails to account for almost €1.5 billion” in its figures.

For example, Sinn Féin said the cost of introducing a state-run childcare sector would cost €167 million, whereas Fine Gael has estimated the cost at €987 million.

Sinn Féin said reducing the pension age to 65 would cost €127 million, whereas Fine Gael estimates it would cost €450 million.

“This gaping hole in their costings further highlights they simply cannot be trusted with the public finances. 

"It’s clear to see – especially with their misleading rounding of numbers which conveniently wipes over €85 million off the books. In their rush to be populist, Sinn Féin wilfully and irresponsibly underestimate the true cost of their proposals,” the paper issued by the Fine Gael press office states.

The Fine Gael document also says that Sinn Féin is ‘high-tax & anti-jobs’. The economy is just emerging from an unprecedented shock, yet Sinn Féin proposes 14 separate tax increases amounting to €1.5bn.

Sinn Féin’s public expenditure spokeswoman Mairead Farrell said her document took many weeks to produce and is “fully costed”.