Government leaders warned Budget funding will be 'tight enough'
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The three Government leaders have been warned that Budget funding will now be tight with inflation eating up a considerable amount of extra money available.
It is understood Taoiseach Leo Varadkar, Tánaiste Micheál Martin and Green Party leader Eamon Ryan have been told that a lot of Departments will need a significant amount of extra funding just to stand still next year.
Public Expenditure Minister Minister Paschal Donohoe and Finance Minister Michael McGrath told the Coalition leaders last night that Budget 2024 be “tight enough” given the inflationary pressure now on the public finances.
The overall budget package is expected to be at least €6.4bn with the government planning to spend around €1.1bn on taxation changes.
Government sources have said there will be a number of one-off payments made to households but the lump-sum payments will not mirror what was spent last year.
Ministers are due to begin their bilateral meetings with both Mr McGrath and Mr Donohoe as budget talks intensify.
The Budget briefing came directly after a Cabinet committee on health during which the Budget and spiraling overspend by the HSE were discussed.
One source described the meeting as “productive” despite projections that the HSE will go over budget by €1bn this year.
The significant budgetary spending at the Department of Health has caused tension with the Department of Public Expenditure.
Mr Donnelly said there were three main causes for the overrun.
A level of spending that should not be happening within the HSE which he said was mainly driven by some hospitals on agencies and overtime, health care inflation which he said was “well ahead” of what was hoped for.
Mr Donnelly said he is engaging seriously with the HSE on the level of overspend which should be controllable and must be brought down.
He said the issues of inflation and patient demand are matters the Government has to deal with.
Meanwhile, Minister McGrath is expected to bring a memo to Cabinet with further details of a promised long-term savings fund.
The fund will see some of the billions of euros collected from corporation taxes each year set aside to pay for vital infrastructure in the future.
The State is expected to generate a cumulative budgetary surplus of €65 billion over the next four years primarily as a result of record corporation tax receipts.
Mr McGrath has previously said the Government had an opportunity it could not afford to let slip and setting money aside could ensure capital spending is not cut in the event of an economic downturn.