Parties jostling for moral high ground ahead of budget

Pension rises top the list of differences before budget, writes Political Correspondent Fiachra Ó Cionnaith

FINE GAEL and Fianna Fáil are set for an 11th-hour budget battle after it emerged pension increases may be delayed until early summer 2017 to allow similar increases for people with disabilities, widows and carers.

Social Protection Minister Leo Varadkar clashed with Fianna Fáil’s finance spokesman Michael McGrath and public expenditure spokesman Dara Calleary yesterday as both parties attempted to gain the electoral upper hand before the financial package is revealed on Tuesday.

On Thursday night, after a special cabinet meeting saw the majority of budget proposals signed off by ministers, Mr Varadkar said he wanted to delay a widely suspected €5 pension rise until April, May or June next year.

The social protection minister has previously made it clear a €5 pension increase sought by Fianna Fáil would cost €150m over a full year and mean he had no other resources to spend on other parts of his department.

However, if an increase to the pension rate was delayed for a number of months, government sources confirmed it would allow him to provide a pro rata or similarly scaled increase for people receiving the disability, carers, widows and blind allowance, groups which lost €16 a week at the depth of the economic crisis.

While officially the decision, which remains under discussion, is about ensuring the most vulnerable in society benefit from Ireland’s economic recovery, it has been widely seen as an attempt to reduce Fianna Fáil’s chances of gaining public support as any push to impose a pensions hike from the start of the year would be framed as ignoring other at-risk groups.

Responding to the delay rumours at the launch of his own party’s budget priorities Fianna Fáil’s Michael McGrath said any pension hike stalling would not be credible as increases traditionally take effect from January 1.

The party’s document failed to include any costings due in part to the sudden increase of the fiscal space from €1bn to €1.2bn by Fine Gael. “Normal budget arrangements and plans are announced on budget day, not six months later,” he said.

At the same launch, party colleague Dara Calleary said “absolutely, mid-year is not a starter” and while “Leo likes to make you think he is all cuddly and caring and that he suddenly walked into a phonebox and walked out with a cape of fairness, that’s not Leo”.

However, during two later media appearances, including on RTÉ’s Six One News last night, Mr McGrath appeared to soften the view, saying that talks “are still ongoing” and that while a mid-year pension rise was a step too far his party certainly would listen to an April deadline.

The standoff saw Independent Alliance TD and Disabilities Minister Finian McGrath yesterday say while he is “right behind pensioners” he believes everybody, including disability groups for whom he is seeking social protection funds, “has to be treated the same”. The standoff is ultimately unlikely to lead to the budget failing to be passed.

Similarly, separate Fianna Fáil concerns that Fine Gael proposals to give first-time home buyers a tax rebate of up to €20,000 could see house prices increase further are not expected to see the budget rejected.

However, while Mr Calleary yesterday said the first confidence and supply deal budget is about “putting on the green jersey” and has nothing to do with opinion polls, the friction between Ireland’s two main parties highlights the importance of the financial package to both parties’ immediate futures.

Meanwhile, Fianna Fáil has defended its decision not to include any costings in its list of budget priorities — including 800 more gardaí, raising the pension by €5, reducing class sizes, and cutting USC for low and middle income earners — saying they are reminders of the confidence and supply deal with Fine Gael and that the last-minute revelation that there will be €200m more to spend next year meant costs could not be finalised.

The Independent Alliance is expected to hold further talks with Fine Gael this weekend to push a series of its priorities. Alliance TD and minister of state Sean Canney last night said Tuesday’s announcements are “a budget for Ireland, not for some parish wherever”.