Minister for Finance Michael Noonan has played down expectations of a budget giveaway next month, saying that he has limited resources for tax cuts.
"You can do the maths yourself - about a billion is available - take a third of it [for tax cuts]," Mr Noonan told journalists at the Fine Gael think-in in Newbridge, Co Kildare.
The Minister was speaking after he and Minister for Public Expenditure Paschal Donohoe briefed the Fine Gael parliamentary party on the public finances and the forthcoming Budget, which he said would not feature many "surprises".
Fine Gael was "no longer committed to the detail" of tax cuts promised in its election manifesto, Mr Noonan said, but rather those promised in the Programme for Government negotiated with Independents and the confidence and supply arrangement agreed with Fianna Fáil following the election.
“That’s what happens with coalition governments,” he said.
He said the Budget parameters would be in line with those outlined by the Government before the Dáil’s summer recess.
“In general terms, the arithmetic hasn’t changed since the spring statement, despite Brexit,” he said.
“We will have slightly under a billion between [Mr Noonan and Mr Donohoe] and we decided in the Programme for Government that this would be divided between tax and expenditure on the basis of 2:1 in favour of expenditure. So there isn’t an awful lot for tax reductions.”
As a result of spending commitments already made, Mr Noonan said this year’s Budget will be bigger on the expenditure side by “about €1.7 to €1.8 billion”.
Mr Noonan also suggested he would introduce a sugar tax in 2018, in line with plans in the UK.
Spending increases
Mr Donohoe also played down expectations of big spending increases, explaining that the available funds would not be enough to meet the demands from Government departments for additional resources.
He said a number of requirements would need to be met in the Budget, including “the need to support our schools more and our social systems more.
“To deal with demographics, and after we account for the cost of Lansdowne [Road Agreement] and then once we honour our capital commitments for next year, we have approximately €600 million currently available in current expenditure and we have €250 million available in capital expenditure choices.
“And that is the net fiscal space that we outlined in the summer economic statement,” Mr Donohoe said.
