Taoiseach Leo Varadkar has cast doubt on Green Party plans to cut the cost of childcare by 50 per cent by Budget 2024, saying the Government will try not to stoke inflation with an overly-large budget package.
In an interview with The Irish Times, Mr Varadkar also addressed speculation around his leadership of Fine Gael and about how a recent opinion article by junior Ministers calling for tax cuts was seen as his party trying to distinguish itself from Fianna Fáil which is “not what we should be doing now”.
Last year, Minister for Children Roderic O’Gorman said he wanted to see a 50 per cent average reduction in the cost of childcare over Budget 2023 and this year’s Budget 2024. It was then viewed as effectively being Government policy to have a 25 per cent cut in each budget. Mr Varadkar has cast doubt on the plan now, however.
“Minister O’Gorman has set the target of reducing childcare costs by 50 per cent. We kind of did half of that in the last budget. I am not sure we can go as far 25 per cent in the next one but it certainly is our intention to bring about a further meaningful reduction in the cost of childcare for families.”
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Asked why the Government might not be able to do the full 25 per cent cut, he said: “It all has to add up. I often say it is not a choice between tax reform and increased spending. What we have to decide first of all is what is the quantum? How big can the overall budget package be without stoking inflation, which is the worry if the budget package is too big. It is just not possible at this stage to say how much can go to childcare.”
Mr Varadkar’s comments on Budget 2024 come after an Irish Times/Ipsos poll last week found little enthusiasm among voters for using the budget surpluses for tax cuts, with a strong desire instead for spending on public services and investing in infrastructure.
Mr Varadkar said he “can absolutely guarantee” that the investment and spending package will be “much bigger than the tax package as it has been for the last number of years”.
He said the Government would be able to use the projected “super surplus” to pay down debt, to set aside money for future pension costs, for additional infrastructure in areas such as housing while “still having plenty of room for increases in public spending and a tax package”.
Asked about last week’s poll which showed Fine Gael drop to 18 per cent, Mr Varadkar said “polls don’t predict the outcome of general elections”.
“But one thing I do think they show consistently is the Government parties combined well into the 40s [per cent]. Now, what you need to form a government is something around 50 per cent and I think this is a Government that can get re-elected if the three parties stick together.”
He added: “One thing that perhaps was not good about the article by the three Ministers of State is that rather than being perceived as Fine Gael stating one of its policy aims – which is to make sure that people don’t pay the highest rate of income tax until they earn more than €50,000 – [it was perceived] as an attempt to kind of distinguish us from Fianna Fáil. I don’t want us to be in that space as a party for the next year or so anyway.
“Parties can distinguish themselves from each other at election time. That’s not what we should be doing now. I think we should be working together.”
On speculation that an election could be called after next year’s budget is delivered, he said: “No election is planned. So this Government can run until March 2025. It may well run until March 2025.”
There have been rumblings in recent weeks of a sense of dissatisfaction creeping into the Fine Gael ranks, some of which has focused on Mr Varadkar’s leadership, with some privately commenting that Mr Varadkar appears less enthusiastic in his second tilt as Taoiseach.
“I am very enthusiastic about the job, very grateful to have a second chance to serve as Taoiseach. I think maybe what’s different the second time around than the first time around is the novelty. For me that’s different now, I have a lot of experience behind me. Maybe I’m a little more serious,” Varadkar said.
