DANIEL MCCONNELL: How budget battles were won and lost

Five members of the Cabinet recount their experience of the process of Budget 2018, writes  Political Editor Daniel McConnell

THE phone beeped, and Finian McGrath jumped up and moved to step outside the office on the ground floor in the Department of Finance.

“It’s all right Paschal, don’t worry, I am not leaking the budget. By the way, Ireland is 1-0,” came the quip as he exited, which drew laughter from those present.

But there was tension in the air.

Last Monday night, as the country sat down to watch the Ireland v Wales match, the Independent Alliance ministers Mr McGrath, Shane Ross, John Halligan, Kevin ‘Boxer’ Moran, along with whip Seán Canney, were locked in last-minute talks with Finance Minister Paschal Donohoe over Budget 2018, which he would deliver less than 18 hours later.

There was a tongue-in-cheek demand from Mr McGrath at the start of the talks: “Listen Paschal, we need to be out of here by a quarter to eight.” They weren’t, and ended up getting updates on the game via text messages. When James McClean’s goal went in, all phones in the room went into meltdown.

At the same time, Mr Donohoe was also trying to finalise matters with Fianna Fáil’s public expenditure spokesman Dara Calleary, and it was on Monday that agreement to reduce the pupil-teacher ratio was reached. His colleague Michael McGrath had agreed the tax side earlier in the day.

It was after 11 before the deal was done and the budget was sent off to the printers. But it was an arduous deal which was six long weeks in the making.

“When we came back off our summer holidays, at the end of August, you go in to talks with Paschal. You present your submission and your estimates. The boys take it away and that goes on for five or six weeks and it was only toward the end that Paschal and the boys have one-on-one meetings with you,” said one minister. 

As it was his first full budget, the pressure on Mr Donohoe was immense. For the first time since the late Brian Lenihan delivered his last budget in 2010, there was one minister in charge of both the finance and public expenditure elements of the budget.

Having thrashed out the framework of the budget with new Taoiseach Leo Varadkar during the summer, Mr Donohoe set to work. He was clear from the off that this budget was a three-way deal — Fine Gael, Independents, and Fianna Fáil — and all had to be listened to and taken care of.

Today, five members of the Cabinet recount their experience of the process of Budget 2018.

“I found things got done quicker when I met Paschal on his own. When the officials were there it was very formal and less productive. You meet Paschal maybe as many as six times before the real run-up to the budget in the past two weeks. And then you would meet him a few more times to finish it off,” said one.

From speaking to ministers, it is clear Mr Donohoe is a formidable negotiator.

“Paschal is total ‘cool hand Luke’... a serious negotiator. He is always very courteous and very warm. When it comes down to the tough decisions, he is very honest. He would tell you straight out what he can’t do. He would get the things he can’t do out of the way first but always finish with what he can, so you leave feeling delighted with yourself,” said one Independent minister.

“When he has bad news, he will ring you personally. He doesn’t pull any strokes like others used,” said one Fine Gael minister.

“His great trick is to run down the clock and let people blow off steam and run out of gas.

“He would help you find a way to take ownership of what got the money and what didn’t. It was highly effective and astute,” said another Fine Gael minister.

THE INDEPENDENTS:

It has emerged that Mr Donohoe met the Independent ministers both in his department for the more formal meetings during the six weeks, but also in their offices on the ministerial corridor. Transport Minister Shane Ross’ office tended to be the venue. He would make his way over by himself, armed only with a pen and a small notebook for the face-to-face discussions.

“When he came to us, we had a lot of meetings in Shane’s office; he would only arrive in with a little notebook. But when you were in the big posh room in Finance, the parlour, he would have all of his staff on side. He was much more formal in DPER [Department of Public Expenditure and Reform]. Robert Watt [Mr Donohoe’s secretary general] was always hanging around,” said one minister.

“It was all very slow in the beginning but it ramped up very quickly. Like I gave Paschal a list of 20 things I wanted done and he would come back and say ‘I can’t do this or that, knock it down to five or six things’ and you leave the room happy,” said one.

It has emerged that Mr McGrath had gone in looking for €100m extra for disability services and was told he couldn’t have that. Mr Donohoe and his officials told him he could have €50m. In the end, they settled on €75m. But what was clear from the talks was that Mr Donohoe was keen to ensure the Independents [the Alliance as well as Denis Naughten and Katherine Zappone] are happy. “There is a complete change of attitude to what went before. He wants us all on board. He says that and reinforced that at all the talks,” an Independent minister said.

FIANNA FÁIL:

While Mr Calleary and McGrath did the heavy lifting on behalf of Fianna Fáil, leader Micheál Martin and his core team of Deirdre Gillane and Pat McPartland were never far away.

Bilaterals began a number of weeks back in the department, with engagement continuing over the phone between Mr Donohoe and Mr McGrath and Mr Calleary. It has come out that there was annoyance within Mr Donohoe’s office that Fianna Fáil was slow in bringing forward its social welfare demands, given how large a budget it is. It is also clear that throughout, Mr Donohoe was doing his best to ensure all sides were kept up to speed, while demanding virtual omerta from everybody. “We were afraid that when he went back to Fianna Fáil and told them what we were looking for, they would steal our ideas,” said one Independent minister.

FINE GAEL:

Interestingly, some of the most tricky conversations Mr Donohoe had were with his own party colleagues. It is understood it was agreed early enough that Health would be a big beneficiary of an increase, with Mr Donohoe backing Simon Harris in his demands for more cash. But with his €685m increase, Mr Harris and Mr Donohoe broke the trend of Health being the last department to be finalised, concluding his business last Friday.

Social Protection Minister Regina Doherty found the going a little tougher and only signed off on her allocation on Monday. But two ministers who were said not to be happy at all were Heather Humphreys and Michael Ring, the latter especially so. Mr Ring would lash his colleagues out of it at Cabinet on the morning of the budget to highlight his displeasure.

THE LAST PUSH:

With the pressure on, Mr Donohoe was working seven days a week, with serious hours put in on Saturdays and Sundays. He would spend a lot of time on the phone over the weekends trying to make progress. By last Friday, he had succeeded in closing off most of the smaller departments, but then a series of rows erupted.

“McGrath was having an individual row with him over the UN Convention funding, and that row kicked off last Friday evening and in fairness to him, they had a bit of a ding-dong on Friday evening. We resolved it late on Sunday evening,” said one minister.

But Mr Donohoe also had bad news for Mr Halligan, who had pushed for an increase in the betting tax to pay for addiction services. He shot that down, to Mr Halligan’s sharp annoyance.

“Most of the discussions last weekend were over the phone but we were on standby to go in. The betting tax thing was ruled out on Saturday; he spoke to Halligan on Saturday,” said one minister.

At the conclusion of their meeting late on Monday, the Alliance ministers couldn’t resist a playful jibe at an exhausted Mr Donohoe. “We’d always slag him in the meetings ‘Your head must be fried dealing with us,’ they would joke with him.”

He responded: “Ah no, we just keep the show on the road and do our best.”

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