The way has been cleared for the Government to increase the promised bonus to Christmas welfare payments. Money has been set aside for the move as part of a €1.5 billion increase to 2015 Government spending, providing extra funds to a number of departments.
The additional spending, provided by way of supplementary estimates, comes amid mounting talk of an early general election, with Taoiseach Enda Kenny declining again last night to shut down speculation about a November poll.
Tánaiste Joan Burton, who favours a 2016 election, has already promised to pay a Christmas bonus, giving an extra 50 per cent on top of normal payments this year, double the additional amount paid in 2014.
However, there were indications last night that a 60 per cent bonus is now on the cards.
Documents released today in advance of the budget next Tuesday confirm another €600 million being allocated to the Department of Health this year, in excess of €400 million for social protection, some €100 million for transport and €50 million for education.
Tax surge
The €1.5 billion also increases the pre-budget starting point for spending next year. To this will be added €750 million in new spending measures in
Budget 2016
. This is likely to bring the total additional spending planned for 2016 to €2.25 billion compared with the starting position for 2015.
The surge in tax receipts means that the Government can afford to do this, while still beating its budget deficit targets this year and next.
A Department of Finance White Paper setting the ground for the budget indicates tax revenue this year will be €2.3 billion ahead of original targets.
Although €1.5 billion is being deployed for supplementary spending, €800 million has been set aside to cut the deficit.
“It’s expected that we’ll reach a deficit of 2.1 per cent, well below the 2.9 per cent required under EU Commission rules,” said the department spokesman. The budget will also cut tax by €750 million.
The White Paper indicates that the deficit in 2016 would drop to 0.9 per cent of GDP next year if there were no budgets changes. The budget is likely to target a deficit of 1.5 per cent of GDP or less.
Mr Kenny and Ms Burton spoke again yesterday but the Taoiseach has said nothing to quash election speculation.
Senior Labour sources acknowledge a November poll is increasingly likely. Ms Burton and Labour TD Ciarán Lynch, chairman of the banking inquiry, said the committee should conclude its work as it falls if the Dáil is dissolved.
Mr Kenny, whose advisers met to continue election preparations, will appear tomorrow on The Week in Politics on RTÉ television. Sources believe a November election is almost certain if he does not firmly indicate he favours a 2016 poll.
