Home Business Coalition gets going at last to deliver mother of all budgets

Coalition gets going at last to deliver mother of all budgets

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There is a running joke in government circles that tends to get repeated around Budget time: Leo Varadkar is demanding a cut to excise duty on wine. The Tánaiste is still smarting over the decision to add €1 to the cost of a bottle of wine in one of the last austerity-era budgets seven years ago.

One could be forgiven for thinking it was true when the joke/rumour was circulating last weekend, given the enormous amounts of extra spending the Government was planning and a general feeling that something should be done to lift the national mood.

But in the end, alcohol was untouched in what was an unprecedented Budget package of an extra €18bn that was all forgotten about in record time. Not even the Opposition could muster the strength to moan at the Taoiseach about it during Leaders’ Questions in the Dáil the following day.

“I doubt many people paid much attention to Budgets in World War II,” mused one government figure later.

As Ministers Paschal Donohoe and Michael McGrath did the media rounds on Wednesday, public attention had already been diverted towards escalating numbers of Covid-19 cases and the prospect of further severe public health restrictions. Tuesday’s announcement was in part about putting in place the architecture of economic supports in the event of a second lockdown.

Even though they have made their peace with loosening the purse strings, public spending officials are already anxiously looking ahead. “The harder thing next year will be trying to get the money back,” said one.

Meanwhile, Fine Gael TDs who were relieved of their Cabinet positions in June, are privately bemoaning that if only some of this money was spent in last year’s Budget then the party would not have endured its second worst-ever election result.

The rural affairs minister Michael Ring was said by one Fine Gael source to be “privately bitching about Paschal never spending the money before the last election”.

It is arguable whether there are any Budget winners and losers when there is such largesse but those centrally involved in the negotiations of recent weeks observe that Fine Gael ministers may have fared better given their experience.

“Everything we asked for we got,” said one ally of Heather Humphreys. The social protection minister was lucky she found herself at one with the public expenditure minister on the need for a massive increase in welfare spending – €25.1bn in total next year.

Fianna Fáil were quick to brief about their role in securing the largest-ever budget for the Department of Social Protection, prompting some eye- rolling in Fine Gael. “Let them have one,” said one figure.

Rather than across-the-board increases, McGrath and Humphreys agreed on targeted increases for certain vulnerable cohorts – pensioners, carers, people with disabilities, and families.

“Heather fights her corner on every issue, but she made the case for it and understands the Budget process,” said one official impressed by her approach. Despite being late to agree on it, the delivery of a Christmas bonus was never in doubt. The only decision was the eligibility criteria given the numbers on pandemic payments.

The huge banks of data in the Department of Social Protection allow officials to quickly calculate the cost of cutting the 15-month eligibility requirement to four. “Social Protection runs a really tight ship, they can tell you stuff very quickly, unlike the HSE – it’s very hard to get a number out of them,” said one source.

The pandemic appears to have put paid to the historic reluctance in the Department of Public Expenditure (DPER) to sanction pouring endless billions into the black hole of health. Not only did Stephen Donnelly secure €2bn to deal with Covid, he got another €2bn for wider healthcare upgrades and reform. One minister praised his “clever” Budget wins with targeted funding for certain strategies.

“He got a lot of money and at the end of the year he’ll have something to show for it,” said another government figure. “He will have new beds opened. He will have zapped certain waiting lists. He might rub people up the wrong way but he is determined. He is a bit unflappable.”

His predecessor, Simon Harris, secured an extra €50m for his new Higher Education department that will go towards grants of up to €250 for students. The measure was met with some resistance and was only agreed late on Monday night. “Fianna Fáil are very pissed off about that. It was just a sneaky Harris move. He pushed and pushed for it and Leo supported it,” said one government source. A second source played down the row but noted: “It wasn’t a proposal that was out there. He got it but he had to ruffle a few feathers.”

Allies of Harris were unapologetic and claim the Taoiseach was strongly behind it. “Trying to top up grants for students and their families before Christmas is not something he will ever regret,” a source said.

There were more severe last-minute rows over the housing budget amid resistance in DPER to some of the proposals brought forward by Minister Darragh O’Brien. “DPER fought us on f**king everything,” said one source involved in the discussions. “But they’re the gatekeeper and that’s what they do.”

According to the same source, DPER officials had initially proposed a capital budget of just €33m next year. The final figure came to €500m and the Fianna Fáil minister was delighted to announce what he said was “the single biggest investment in housing in the history of this State”.

A colleague of O’Brien’s texted: “Viva la revolution! Good Fianna Fáil building and public spending budget!”

Privately, some mandarins felt O’Brien and his department did not come to the table with fully fleshed-out proposals on an affordable purchase shared equity scheme, the details of which have not yet been published.

O’Brien not only rejects this contention but is promising the detail will be published within weeks. He has the backing of Michael McGrath. The pair sat down together in the Convention Centre the Wednesday before the Budget to agree much of what ended up being the final package. “It just took the civil servants a bit longer to get there,” said the source.

While the pandemic may have shifted public focus away from the housing crisis, there is pressure on the minister to deliver. “He is a good showman, Darragh, but we want to see shovels in the ground now,” said one government source. “He is absolutely determined to get this done. So it has to happen.”

Those involved in the deliberations of recent weeks had one important observation: the Coalition is, after a rocky start, beginning to function properly.

One example of this is how the Greens ensured a presence in most of the deliberations primarily represented by junior finance minister Ossian Smyth.

Despite the controversy they have caused, there is an advantage to the large number of Green Party advisers in Government Buildings, according to one Fianna Fáil source.

“They are professional. Their advisers bring a certain structure to how they go about their asks. When they come with their ideas these are well thought-out. They’ve put a good bit of thought into learning the lessons of the last time.”

A senior Fianna Fáil figure added: “It’s all Kumbaya.”

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