Analysis: Despite Howlin’s good news austerity is still watchword

Not to be outdone by his Fine Gael colleague, Minister for Public Expenditure Brendan Howlin also had good news to impart - a €200 million capital spending package to stimulate jobs.

The sale of the National Lottery was fortunate in its timing for Howlin in that without it he would not have had very much positive news to dispense.

As well as the €200 million for the planned National Children’s Hospital, he has announced that a further €200 million is being targeted at a programme that will help road maintenance and repair works, a new round of sports capital grants, a new national indoor training arena, a better energy programme, housing adaptation grants, a national city of culture idea, development of the wild Atlantic way and 1916 commemoration projects.

Lottery funding is a gift that keeps on giving. A further €30 million will go for housing programmes.

The total amounts to €430 million (a little higher than the €405 million secured for sale of the licence rights).

But they are, in truth, small diamonds in the rough. Howlin had over €1.5 billion in cuts to make and that is never easy, and never palatable.

Many of the cuts have already been leaked in advance of today’s announcement - such as the cut to €100 in jobseeker allowance for those under 25, the cuts in telephone allowance for pensioners, new prescription charges, and the lowering of the income limit for over 70s medical cards to €900 per week for a couple, or €500 for a single person.

But there are many other cuts that have been disclosed today for the first time. They include a reduction in weekly maternity benefit to €230 (and that comes after it a tax at the marginal rate was introduced last year).

The time span before illness benefit can be claimed has been increased from three days to six days. An hour after Noonan lowered the tax relief ceiling for private medical insurance, Howlin announced there are more charges for private patients in public hospitals.

Another cut that might prove controversial when the details are fully explained is the cut of €25 million in third level funding - the areas where savings will be found will be identified later.

In Social Protection, another cut that will affect the older demographic is the scrapping of the €850 bereavement grant.

While one hand giveth and the other hand taketh away. While the capital spending programme will stimulate spending on sports and roads, the 'ordinary' allocations for both are being reduced - a €3 million cut in funding for the Irish Sports Council as well as swinging €46.5 million reduction in the allocation for repairs of local and regional roads.

Howlin had always the tougher sell of the two Ministers and he has done well to dress up the capital spending programme. But collectively are we astounded by the good things that both Ministers have announced? Well, not quite.

Make no mistake about it: This was not a giveaway budget.

Austerity is still the watchword.