Finance Minister Paschal Donohoe has revealed he should have €700million to play with in the Budget.
This will give him plenty of scope for vote-winning initiatives ahead of the General Election next year.
Mr Donohoe revealed a skeleton outline of the Budget through the Summer Economic Statement.
The package will see €2.8billion available for spending, tax cuts or both in October.
However, €1.9billion has effectively already been earmarked for matters including pay rises and spending on infrastructure.
Another €200million will be set aside as a contingency for further unexpected costs associated with either the National Broadband Plan or the National Children’s Hospital.
This leaves €700million for Mr Donohoe, but the elephant in the TK Whitaker Room in the Department of Finance yesterday was Brexit.
Mr Donohoe said: “Since the UK referendum result in 2016 a number of steps have been taken to build up the resilience of the economy so we have the capacity to deal with adverse economic shocks.
“This includes building up our fiscal resources by balancing our books last year for the first time in a decade, reducing our debt burden and establishing the Rainy Day Fund. The steady increases in public spending implemented in recent years, with a particular focus on public capital investment, play an important role in supporting resilience in the face of Brexit.”
Political opponents of the Government last night said Mr Donohoe hasn’t taken enough precautions in case of a hard Brexit.
Fianna Fail finance spokesman Michael McGrath said it could hit the country for €30billion over five years.
He added: “We have known for quite some time that a no-deal Brexit would be disastrous for Ireland’s economy but in today’s Summer Economic Statement we see what the implications could be for the Government’s finances.
“In an orderly Brexit scenario Ireland is projected to run a general Government surplus of 0.4% of GDP in 2020. However, in a no-deal scenario this would deteriorate to a deficit of between 0.5% to 1.5%.
“In money terms this could represent a reduction of €6.5 billion, which will no doubt have to be funded by increased borrowing from the market.
“If we look out to 2024 a no-deal Brexit would worsen the budgetary position by nearly €30billion.”
