Paschal Donohoe warned anything he gives with one hand in the Budget, he’ll take away with the other.
The Finance Minister was softening expectations of those hoping to see a giveaway with the economy once again operating at full tilt.
The Economic and Social Institute Research Institute only last week warned the economy is overheating, but fuelling it with tax cuts would not be wise.
The main reason for this is the looming uncertainty of Brexit, which threatens to send our national books spiralling into deficit.
Mr Donohoe presented his Summer Economic Statement where he revealed there should be around €700million to play with in the October Budget.
Yesterday he spent all day with economy stakeholders and interest groups at the National Economic Dialogue in Dublin Castle.
He said: “We will accommodate a budgetary package of €2.8billion this year.
“Built into this in the Summer Economic Statement is provision for a capital reserve which has the capacity to accommodate funding requirements for the National Broadband Plan and the National Childrens’ Hospital in 2020.
"This means that of the total Budget package of €2.8billion, €700million is unallocated.
“We should not go beyond this unallocated amount for further expenditure increases or taxation reductions.
“Any package beyond €700million would require commensurate revenue-raising measures.”
This limits the opportunity for Budget giveaways ahead of the General Election next year.
Mr Donohoe added: “Targeting a surplus of 0.4% of GDP, or indeed aiming for a higher surplus, would allow some headroom to absorb the impact of Brexit. In a disorderly Brexit scenario, the same budgetary parameters will apply.
“However, come September, if this is the most likely scenario then an approach will need to be adopted to ensure we best meet the impact of this exceptional challenge, whilst preserving the longer-term sustainability of the public finances.”
Meanwhile, in the Dail, Taoiseach Leo Varadkar was backing down on his promise to provide tax relief for the wealthiest in society by raising the upper tax threshold to €50,000.
He conceded “Brexit uncertainty” means he may have to stall his plans for this in “the immediate Budget year”.
