The Minister for Finance, Mr Cowen, has decided to reduce the scope of the Budget Estimates next week because he is still finalising the capital expenditure package for 2005.
Any new capital programmes will not be announced until Budget Day on December 1st, although expenditure on projects started under the five-year capital envelopes introduced last year will be included in the Estimates.
As the Estimates process nears its conclusion, Mr Cowen is said by certain informed sources to be targeting an overall increase in expenditure of some 7 per cent on Budget Day.
Despite the recovery in tax revenues, Mr Cowen has already signalled that he will be introducing a modest package in his first budget. The bulk of any extra spending will go to health, education and social welfare, although additional money will be available for Garda recruitment.
The exclusion of the new capital expenditure package from the Estimates arises from a delay in the Estimates process in the run-up to the Cabinet reshuffle last September.
Removing a central strand of expenditure from the Book of Estimates may enable Mr Cowen to produce a "big bang" package on Budget Day. However, some sources attributed the delay to the arrival of new Ministers in several major Departments after the reshuffle.
Mr Cowen is new to Finance, as are the Ministers in the priority spending portfolios of Health, Education and Transport. While no new capital projects will be included in the Book of Estimates, Mr Cowen will allow Departments to carry over in 2005 capital allocations unspent this year.
The carry-over is said to amount to some 4 per cent of all capital expenditure this year, with among those Transport and Environment holding the biggest sums of unspent money.
Several political sources said Mr Cowen was unhappy last week when the Minister for Social and Family Affairs, Mr Brennan, made a pitch for some €2.6 billion additional funding at a meeting of the Fianna Fáil parliamentary party.
However, sources close to Mr Brennan denied any friction with Mr Cowen. Mr Brennan told Fianna Fáil TDs and Senators that some €2.6 billion in additional funding was required in the next three budgets to meet the social welfare commitments set out in the Programme for Government and the Sustaining Progress partnership deal.
He is understood to be seeking an increase next year of at least €1 billion.
The final negotiation of the social welfare package will not take place until after the Estimates are published, as extra welfare spending is always a matter for Budget Day.
