In July, as the country was bathed in a heatwave and the coalition struggled to agree on precise rules for the return of dining room, a seismic spending battle was underway between ministers backstage. Public Expenditure and Reform Minister Michael McGrath has been locked into a series of tense bilateral meetings with ministers and their officials over funding for infrastructure projects over the next decade. The talks turned “quite hairy in July,” according to a well-placed source, but those tensions have remained largely under the radar.
Among the most controversial negotiations were those on the financing of the new accommodation model for asylum seekers which will replace Direct Provision before – the Minister of Equality and Children Roderic O’Gorman hopes – the end of the mandate. of the government. There were also important discussions on capital commitments to housing and school buildings.
But the longest and perhaps most tense discussions have been about transport. It is not necessarily the specific projects that will be described in the National Development Plan tomorrow, but the overall allocation of expenditure. In the end, Green Party leader Eamon Ryan, Minister of Environment and Transport, secured an allocation of 35 billion euros until the end of the decade, when some of the projects that will be announced and re-announced tomorrow should be delivered.
Ryan also reportedly admitted that it would be politically untenable to abandon the road projects initiated during the last NPD released three years ago. “It was not an option,” said a senior source from Fianna Fáil. The result is that every road project contained in the 2018 PND should be included in the new plan released tomorrow at a launch in Cork.
The ministers of Fianna Fáil and Fine Gael are perfectly aware of the sensitivities around specific roads and of the fear among their backbenchers that the Greens are ready to put certain projects on the back burner.
Ryan in particular has been under pressure on the N24 road between Limerick and Waterford, which has been described as the worst main road in the country and crosses a number of Dáil constituencies, but mainly passes through Tipperary. “Once this road is completed, every city in this country, as well as the Cork-Limerick road, will be linked by a motorway. It is a real priority that the N24 project remains in the NDP, ”Tipperary-based Senator Garret Ahearn said in a pointed statement released by Fine Gael. Friday.
But every party in government has to talk about its victories. The Greens insist this weekend on the fact that they have made a commitment that for every € 1 spent on the roads, € 2 will be spent on public transport infrastructure.
But this is not a 2: 1 split of the € 35 billion pot. A substantial part of this amount is already committed to the maintenance of roads and the public transport fleet. Over the next 10 years, around 360 million euros will be invested annually in walking and cycling infrastructure in towns and villages across the country, including greenways.
This means that just over half of the 35 billion euros will be split 2: 1 over the next decade between public transport infrastructure and new roads. “All these road projects are there, but they have to follow the 2: 1. It has to come from existing envelopes, and whether they manage it or not, I don’t know, but they will have to, ”said a Green Party source.
The NDP reiterates its commitment to MetroLink as the largest public investment project in the history of the state. He envisions services running every three minutes in his early years, with the ultimate goal of having services every 90 seconds. But when commuters can expect to be able to access this fast service, it’s everyone’s guess. Ryan said last week that he “hoped” the large Dublin Metro project would be up and running before 2034 – seven years after it opened – but “no one knows” how long that would take. It is expected to move through the initial planning stages next spring, and the NDP issued promises tomorrow to bring it into the construction phase. Cynics will rightly point out that we have been here before with this particular project.
More immediately, there will also be plans for BusConnects projects in the four major cities outside of Dublin – Cork, Galway, Limerick and Waterford – in the revised NPD. “There will be a big push on that,” a coalition source said, “because you can get what you pay for.”
Substantial funding will also be allocated to the Dart + program which will see parts of Dublin’s existing Dart network electrified and grow from its current length of 50 km to over 150 km, extending shuttle services to the capital from surrounding counties.
Outside of public transport, Tomorrow’s NDP will present plans over the next four years for Irish Water to invest € 6 billion in the country’s crisp water infrastructure, with more than € 4.5 billion coming directly from of the Exchequer.
The plan will also contain “a total island-wide investment commitment of over 3.5 billion euros” for cross-border projects and a capital investment of 180 million euros in the six fishing port centers – Howth, Dunmore East, Castletownbere, Dingle, Ros an Mhíl and Killybegs. These will encompass ongoing safety and maintenance and the new developments required from 2025.
Overall, the revised PND sets out funding allocations for capital investment in Ireland for the next decade, which will amount to € 165 billion over the next 10 years.
This represents a record level of investment – against 116 billion euros in the previous NPD – and consists of 136 billion euros in Treasury funds as well as 29 billion euros in non-cash investments from semi-states. business, Irish Water and universities. The plan will raise public investment to 5% of modified gross national income, above the recent EU average of 3% of GDP.
“Crossing the line was huge, a big chunk of the budget was spent in July,” a coalition source said. “During bilateral budgeting, capital ceilings are set and are not reopened.”
This means that the budget meetings over the past week and the next few days have focused and will largely focus on next year’s spending. While some departments have settled their budgets for next year with the Directorate of Public Expenditure and Reform (DPER), others such as Health, Children and Social Protection remain to be finalized.
The budget package is 4.7 billion euros, but within it, 3.2 billion euros are already pledged to meet existing levels of public services, including population and wage increases of civil service as well as the increase in capital spending agreed in July.
There will remain 1.5 billion euros, of which 1 billion euros will be allocated to public expenditure measures and 500 million euros to tax measures.
Taoiseach Micheál Martin said last week that he was “concerned” in terms of childcare to ensure there is a package of measures in addition to many other priorities. “Doesn’t the Taoiseach say that everything is ‘key’? “Remarked a figure of the coalition.
Roderic O’Gorman reportedly proposed a series of measures to the DPER, looking in particular at the sustainability of services and affordability for parents.
Options being considered include changes to the National Child Care Program (NCS) as well as increased investment in child care services to support staff retention.
Increasing the universal grant element of NCS is a key demand set out in a 48-page report on childcare released today by Fine Gael, which calls for its systematic extension, as well as other reforms.
Currently, the universal child care allowance is paid at 50 cents an hour up to a maximum of 45 hours per week to all eligible children, i.e. a maximum of € 22.50 per week. There is also an income-tested subsidy with a maximum payout for people of € 26,000 or less. The subsidy decreases as income increases up to a threshold of € 60,000.
The Fine Gael wants to lower the cost of childcare for what is called the tight environment, including households whose cumulative income exceeds the threshold of € 60,000.
The author of the Fine Gael report, Richard Bruton, said this is a “very low level of support” for anyone earning more than € 60,000, and he would like to see a 10% increase in the universal grant – bringing it to almost 25 € per week – and according to means-tested. scheme, which raises the income threshold above € 66,000.
“You have to significantly exceed the cost of living to show that it’s getting priority. I don’t have access to funding, but if you want to see a change it would be great to see 10% improvements in these areas, ”he said. “We would like this budget to indicate that early childhood is a very important area of development – it’s a real win-win if we do that. “
Important Fine Gael sources have warned that despite the publication of an important report by the new A political laboratory within 10 days of the budget, the priorities remained income tax indexation, deficit reduction, increased health spending and a social assistance program.
The form of that welfare package is expected to become clearer this week when Mr. McGrath and Welfare Minister Heather Humphreys meet to finalize their plans. However, coalition sources report this weekend that a state pension increase of at least € 5 is being considered amid mounting pressure from Fine Gael and Fianna Fáil backers to reach 10. €.
“It will be increased, but the figure is not concluded,” said a senior official. “We cannot ignore the other rates of social protection. ”
The fuel allowance should also increase to € 5 after the increase of € 3.50 last year, which brought it to € 28 per week over 28 weeks for anyone receiving social assistance. A larger increase will take into account higher energy bills, but there are also discussions about expanding eligibility.
None of this is settled and could change in the final days of negotiations amid limited room for maneuver. “There are a lot of claims over the billion euros,” another senior official said over the weekend of the amount set aside for new spending.
Meanwhile, global corporate tax changes Ireland may subscribe to in the coming days will result in a blow to the chessboard of at least € 2 billion. Then there is the cost of compensation for those whose homes are affected by mica and the Mother and Baby Home Repair Program. Added to this is the growing public debt, which is now expected to exceed € 250 billion next year.
Ministers were told last month in a confidential note that continuing to increase this stock of debt through unfunded increases in spending would be unsustainable, increase the state’s vulnerability to future economic shocks and depress the standard of living for generations. futures.
But the cost-of-living challenges facing the current generation leaves the government with little choice but to hand out budget giveaways later this month.