Budget 2017: Independent Alliance forced to drop key issues on wish list

Last-minute negotiations are under way today to nail down agreement for tomorrow’s budget on how much pensioners, carers, widows, and others will get, and when, as part of the increases.

Government partners the Independent Alliance have now suffered a budget climbdown after spending options were provided to them on their wish list, by Public Expenditure Minister Paschal Donohoe.

Alliance figures had been pushing for increased payments for the fuel allowance, which runs for 26 weeks from October to April.

But Transport Minister Shane Ross’ group was given figures which showed it would cost €10m for every extra week the allowance is provided to recipients.

Mr Donohoe held phone calls with members of the alliance over the weekend on spending options.

A Government source told the Irish Examiner yesterday: “They’re rolling the numbers again. But it’s better to give people something they will have every week or for the year.”

Demands to abolish prescription charges have also been dropped by the alliance, which was told that to abolish them could leave a spending shortfall of €160m.

Instead, alliance demands for easier access to farm assistance payments and improvements in the Rural Social Scheme look set to be met.

Disabilities Minister Finian McGrath told RTÉ yesterday that the alliance wanted to see the proposed all-inclusive social benefits package brought in as close to January as possible.

Social Protection Minister Leo Varadkar, however, says a full year of pension, carer, and widow benefit increases among others will cost €350m.

A compromise that may be agreed today may see hikes introduced in March at a cost of around €260m and Mr McGrath signalled this may be acceptable.

Fianna Fáil leader Micheál Martin said at the weekend that the increases should start in January but refused to be drawn on whether it would be a “red line” issue for his party for tomorrow’s budget.

Mr Martin claimed there was an “element of internal Fine Gael politics at foot here”, with the issue of delayed payments being “sprung” into the budget negotiation talks so late.

The increased spending for social protection has been partially made available by the extra €200m now available for next year’s ‘fiscal space’, bringing the total increase to €1.2bn for 2017.

Fianna Fáil is also set to abstain on the budget, with sources noting the party is only required to ‘facilitate’ it under the confidence and supply agreement with Fine Gael.

However, a fresh row threatens to destabilise the Government’s budget support. Campaigners with Independent Alliance Minister John Halligan say new details in a Department of Health briefing note for a review of services at Waterford Hospital show it was flawed from the start.

Any decision by the Waterford TD not to support elements of the budget or to abstain in the Dáil on related votes would put huge pressure on the Government.

Government and Fianna Fáil figures, however, were confident the budget would be agreed for tomorrow.

Elements that have been agreed include a first-time buyers’ grant, which looks set to be capped at €20,000 per purchase, for new homes valued up to €400,000.

Cuts are likely for the bottom three USC rates, while 11,000 children who qualify for the domiciliary care allowance will be entitled to medical cards.

There is set to be an increase in the inheritance tax threshold and supports for self-employed people.