Good morning,
“We have been saying that a moment of change will come,” Paschal Donohoe gravely intoned, informing reporters yesterday that the corporation tax take in September slipped to €1.8 billion in September, €300 million less than during the same month last year. Overall, corporation tax is down 23 per cent compared to the same period in 2022. The dip now looks likely to become a trend.
The Minister for Public Expenditure is correct – he, Minister for Finance Michael McGrath (who said yesterday corporation tax income was still growing, but at a “dramatically” slower pace) and their officials must be hoarse with all the warnings they have issued about the volatile nature of corporation tax receipts as corporate profits flooded the exchequer. Now, on the eve of the coalition’s most delicately balanced budget, these warnings are being borne out.
They cannot plead poverty, but for the time being, the mood music supports their firm stance for prudence. The dip does not, at this juncture at least, look like the kind of economic shock that would justify the pulling up of the budgetary handbrake, and it would be a major shock if the shape of this budget fundamentally shifted now. But as they approach the final furlong this is a relative boost to the spending ministers as they face off with their Cabinet colleagues, bolstering their negotiating position and handing them a trump card. In truth, their approach would probably not be much different even if this dip hadn’t arrived – being one part Merrion Street orthodoxy and the other traditional pre-budget management of expectations. But whatever about the short term gain in budget negotiations, in the medium term, the awkward questions prompted by these risks crystallising will likely become part of the mainstream of Irish politics.
All this and more is covered off in our lead story, complete with warnings on economic growth and a coming technical recession.
Best reads
Cliff Taylor on those gloomy forecasts.
Elsewhere, the pressure guage on criminal justice issues continues to inch upwards, tightening the focus on Minister for Justice Helen McEntee, writes Pat Leahy.
Miriam Lord on everything from budget bluster to Nagorno-Karabakh.
Martin Wall runs the rule over the fall of Kevin McCarthy, speaker of the US House of Representatives.
Naomi Klein on conspiracies, climate and the 'personal brand'
Playbook
Dáil actions kicks off with topical issues shortly after 9am, before a motion from the Regional Group on the Garda. Leaders’ Questions is at midday, with Taoiseach’s Questions following at lunchtime. Government business in the afternoon will see the Dáil deal with business on human trafficking, judicial appointments and legislation addressing suspect financial transactions.
Proceedings commence in the Seanad at 10.30am, with the second stage of the Policing Security and Community Safety Bill alongside statements on student accommodation and access to third level places at 3pm. Private members business for Fine Gael Senators rounds out the day.
Find a full rundown here.
Expect disposable vaping to take centre stage at the Enterprise Committee, where Ossian Smyth, the junior minister for the circular economy is up at 9.30am. Hiqa is in at the Health Committee at the same time. Catherine Martin is the afternoon’s star draw, at the Arts and Media committee, where she will be speaking about oversight of RTÉ and the expansion of one of the countless probes into the broadcaster. A few more ministers will be rolled out in front of their respective committees at teatime: Roderic O’Gorman (at his sectoral committee to discuss his €1 billion supplementary estimate, approved last week); Charlie McConalogue and Pippa Hackett at the Agriculture Committee on Forestry (expect ash dieback to feature), and Anne Rabbitte at the Disability Committee.
Full schedule of committee meetings here.
Sinn Féin and the Social Democrats will launch their alternative budgets at 2.30pm and 11am respectively, while students will march on the Dáil calling for more spending on the student accommodation crisis, gathering from midday at the Garden of Rememberance. In the evening, Máiría Cahill’s book, Rough Beast: My Story and the Reality of Sinn Féin, will be launched in Hodges Figgis on Dawson Street at 6pm.
