Budget could be brought forward by up to a month

The forthcoming budget could be brought forward by up to a month by the Government, as it faces significant pressure from the Opposition about the growing cost-of-living crisis, it has emerged.

The Coalition was preparing for a major budgetary package to be announced in October, but multiple sources have confirmed that discussions are under way at a senior level to bring the announcement forward to September.

Four senior sources – in different coalition parties – have confirmed to The Irish Times that the Government is now giving consideration to holding the budget earlier, most likely in late September and potentially the last week. Last year’s Budget was announced on October 12th

No final decision has yet been made, sources cautioned, but one said there was a sense that “people are under significant pressure so we need to do whatever we can” – rather than acquiescing to demands from the Opposition for an emergency budget.

Minister for the Environment Eamon Ryan said on Thursday he “would not object” to the Budget being brought forward to September from October. However, he told RTÉ Radio’s Morning Ireland “I don’t believe we should go with what the Opposition is calling for, to do it today.”

It was a matter for the Cabinet to decide early next week, he added.

Work is ongoing on the summer economic statement, which will set the spending parameters for the budget.

[ Miriam Lord: Militantly bland Michael McGrath bravely brushes off budget begging ]

[ What will moving the budget forward do for the cost-of-living crisis? ]

Separately, Minister of State for Finance Seán Fleming told The Irish Times that Fianna Fáil’s priority in the budget was the cost of living and that this “covers social protection, it covers tax cuts for working families”.

On whether Fianna Fáil agree with Fine Gael’s proposals for tax cuts targeted at middle-income workers he said: “Discussions haven’t happened yet, simple as.”

He added: “We’re not in the game of, I suppose, flying kites. We’re in the business of delivering a good budget package for the families of Ireland.”

Mr Fleming said tax receipts this year have been “very strong” but “nobody can predict what they’re going to be into next year at this stage so that’s important that we’re cautious about that.”

He said the extra revenue this year should be used to fund cost of living measures in the budget and that calls from some quarters for VAT cuts – particularly on petrol and diesel – should be resisted.

He pointed to ESRI research which said cutting indirect taxes such as VAT is a poorly-targeted response to fuel poverty and measures such as welfare increases and the €200 electricity bill credit are better targeted at those most impacted by rising fuel prices.

Mr Fleming mentioned child benefit payments as an area that “has to be looked at” ahead of the budget.

Elsewhere the economic adviser to the Taoiseach said the State’s financial outlook for the winter was uncertain with a “lot of risks” attached. Prof Alan Ahearne told a meeting of Fianna Fáil TDs and senators on Wednesday there was also a strong case for a rainy-day fund at a time when corporation tax returns might begin to decline.

Professor Alan Ahearne is the Taoiseach's economic adviser. Photograph: Dara Mac Dónaill

He said the fact that Ireland had the strongest economic recovery in the European Union put the State in a good position to withstand forthcoming pressures.

In the Dáil, Minister for Public Expenditure Michael McGrath warned it was quite possible that Ireland may face “a prolonged period of high inflation”.

Mr McGrath said the Government believed inflation would peak “in the short number of months ahead” but added: “We cannot be certain of that.”

The Cork South Central TD said there would be “a lot of demands” on taxpayers’ money in the forthcoming budget and that the Government needed to “use the limited resources that we have wisely”.

He was responding to Sinn Féin leader Mary Lou McDonald, who said people were “literally only one bill away from going over the edge” and one rent payment away “from going under”.