Budget 2017 was the easy part, now come more tests

Inside politics: Crucially there has been no rapid unravelling of Government’s carefully constructed budget

Minister for Finance Michael Noonan and Minister for Public Expenditure and Reform Paschal Donohoe leaving RTÉ on Tuesday. Photograph: Eric Luke/The Irish Times
Minister for Finance Michael Noonan and Minister for Public Expenditure and Reform Paschal Donohoe leaving RTÉ on Tuesday. Photograph: Eric Luke/The Irish Times

If you are a Government TD, or even a member of the Government - Hello Minister! - it is a good morning. Your first budget has been done, and so far it hasn’t blown up in your face.

Yes, the headlines yesterday might not have been all you wished for. But crucially, the underwhelmed or critical coverage yesterday morning was not followed by a rapid unravelling of your carefully constructed package after someone rang-in to the Ministers' RTÉ phone-in, or someone's complaint took hold on Liveline, or an opposition TD exploded some unintended landmine under your backside. So far, so good.

Sighs of relief were exhaled all across the Leinster House/Government Buildings complex yesterday afternoon as Ministers realised the budget was going down OK with most people.

It did so because of two things. Firstly, the budget had been carefully prepared and politically proofed specifically to ensure that all foreseeable problems were tackled in advance. The most obvious example of this was the insistence by Leo Varadkar that not just pensioners, but other social welfare recipients, would receive that totemic €5 increase. Crucially, that became possible because the size of the budget increased over the final days of negotiations, as Michael Noonan and Paschal Donohoe found extra money to solve political problems.

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As we report today, that money appeared very late in the process. Mr Noonan insisted that the late expansion of the budget was not driven by political factors. Most of those involved have a different view.

Secondly, if the coalition had to manage to produce a budget, if it was actually going to show it could govern, Fianna Fail needed to help that to demonstrate that it did the right thing when it facilitated the formation of the Government in the first place. None of those factors, by the way, will exist next year. Just sayin’.

Our budget coverage continues today. Harry McGee has details on the pre-budget lobbying.

Sheila Wayman explains who will benefit from the childcare package, while Kitty Holland reports that some childcare providers are saying they will not be able to meet the demand created by the Government's scheme.

All our budget coverage is available here.

Of course, just because it hasn’t blow up in their faces, that does not make it a wise or strategic or reforming budget, though it did contain some elements that were some or all of those things. But what was most important of all, for this Government that has at times seen on the brink of falling apart over small things, is that it was a budget they did together, and it stuck. It was an important test, and the coalition passed it.

That was the easy bit actually

But now come more tests. The budget was supposed to be an exercise in “Brexit-proofing” the economy, and included a range of adjustments to existing incentive schemes and tax breaks.

Mind you, Mr Noonan said that the “best and most immediate policy under our control” to mitigate the risks of Brexit was to “control the public finances”, including principally reducing and eliminating the budget deficit. Mind you, he could have eliminated the deficit next year, but chose instead to keep borrowing to fund the spending increases announced on Tuesday. So, you know - choices and all that.

But as anyone who is paying the slightest attention to British politics will tell you, Brexit is not going away. In fact, in the past two weeks, it has become apparent that the most likely Brexit is a "hard Brexit" - where the UK leaves the single market. Yesterday, sterling took another hammering.That will take some proofing, alright. Dealing with the implications will be the Government's single biggest challenge.

The gathering storm in the public sector, with gardaí, nurses and teachers threatening to strike, is another. In the coming weeks, the Government, which on Tuesday reiterated its commitment to stick by the Lansdowne Road agreement and so resist the demands, will have to find a way through this.

The Irish Independent reports on the imminent restoration of incremental pay increases for nurses .

And gardaí, as was evident at the justice committee yesterday, have their other problems too.

Demands for spending in the health sector continue to grow, irrespective of the inconvenient fact that Ireland spends more than almost anywhere else on health for a poorer return. Nobody seems to want to talk about that.

And then there is Enda Kenny's future. For a very human endeavour, politics can be a pretty unsentimental business. Fine Gael is already beginning to look beyond Enda and despite his comments earlier this week, that process is going to accelerate in the coming weeks.

I met one somewhat mischievous member of the Fine Gael parliamentary party in Leinster House yesterday. It is a long way to Christmas, he suggested. A few very cold months. Read into that what you will.

Pat Leahy

Pat Leahy

Pat Leahy is Political Editor of The Irish Times