LAST UPDATE | 28 Sep 2022
TÁNAISTE LEO VARADKAR has said the government has set aside €2 billion in the ‘rainy day’ fund that could be used to help soften the impact of the rising cost of living.
Speaking in the aftermath of the announcement of Budget 2023, the Minister for Enterprise, Trade and Employment today said the situation will be examined in January or February but noted that he does not envisage a mini-budget being implemented next year.
Varadkar – who is set to become Taoiseach again in December– said Budget 2023 is being front-loaded with most of the one-off payments coming before Christmas, while increases in payments, pensions and welfare will come into effect in January 2023.
“If prices continue to rise, we will have to look at it again in the New Year. That’s why we’ve put money in the tank. We’ve set aside €2 billion – voted into the reserve fund late last night – and we have other contingency funds as well,” Varadkar told RTÉ’s Morning Ireland.
“So, yes we will have to look at the situation come January or February – see where we are in terms of the public finances, what the economy is looking like and, particularly, what prices are looking like,” he added.
Varadkar added that there is a projected budget surplus for this year and next, so there is “some financial firepower” to intervene if necessary.
Speaking at an event this afternoon to celebrate Ryanair’s 35 years in business, the Tánaiste re-iterated this point.
“We have a very substantial package for families and businesses, €11 billion,” he said.
He continued: “We believe that is going to be enough, I’m convinced of that. I don’t see the need for a mini-budget in the new year.
“Be very, very clear about that. But we do have reserve funds and they are there just in case and I think that is a sensible approach.”
Meanwhile, Public Expenditure Minister Michael McGrath said it was “prudent” of the Government to set aside the funds, despite not intending to use them.
“It is a sensible thing to do it is the right thing to do, ” Mr McGrath said.
He added: “There is an incredible amount of volatility in the international economy, not least in the energy markets.
“We don’t know what will happen with the terrible war in Ukraine.
“But it’s a good thing that we have that reserve. We have that funding there if we need it.
“We don’t intend to use it but we cannot rule anything out. It all depends on circumstances.
“And we will use our best judgment as time goes by, as to what is the right decision or course of action to take.”
McGrath made the remarks after answering questions alongside Finance Minister Paschal Donohoe from members of the public during RTE Radio 1’s Today with Claire Byrne annual Budget phone-in show.
Donohoe said the Government had ensured there was a Budget surplus so that they have “the ability to help if conditions changed”.
Donohoe added: “The reason why we have a budget surplus is to be able to respond back to conditions that are changing.”
The remarks echo comments from Green Party leader Eamon Ryan last night saying that the government will review energy credits “in the spring”.
With additional reporting from Press Association
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