Paschal worn out as he tries to sort Alliance budget demands

FINANCE Minister Paschal Donohoe is hoarse. He made a brief appearance before the media yesterday to reveal that €1bn in corporation tax had been found down the back of the couch. In the old days, this would have been enough for a government to launch a parade down Merrion Street – but not Paschal.

He gave the impression of a man who is worn out trying to dampen everybody’s expectations, but most particularly those of the Independent Alliance.

There is turmoil among the junior Government partners over their handling of the budget negotiations.

The four ministers – Shane Ross, Finian McGrath, Kevin ‘Boxer’ Moran and John Halligan – have been fighting among themselves and at times furiously with Fine Gael.

It started in earnest last Tuesday when Mr McGrath interrupted a Cabinet discussion on foreign investment to declare that Fine Gael was trying to “screw” small businesses by raising the 9pc VAT rate.

Mr Donohoe did not respond to the outburst, although a few other ministers are said to have blushed.

In private meetings, though, the Finance Minister sought to lay down the law.

He argued the reduction on VAT for hotels and restaurants was a special recession measure that has served its purpose.

“If you don’t restore tax rates back to normal when the economy is going strong, you’ll never be able to do it,” one source said.

But Mr Ross, who is Tourism Minister, argued that he didn’t want to have the only department delivering bad news next Tuesday.

Ideas were passed back and forth, including the suggestion that the pot of money being used for the Rainy Day Fund could be reduced.

Mr Donohoe laid out another option: a 5pc hike to petrol and diesel prices, which all sides knew would be even more unpopular than the VAT change.

Some in the Alliance believe that Fine Gael sets out to antagonise them or even “turn us into the new Labour Party ahead of an election”.

But they have secured some wins. They will claim credit for the full restoration of the Christmas bonus. After years of lobbying, the tax on gambling will finally go up. And Mr Donohoe has committed in principle to the so-called ‘granny flat grant’.

Meanwhile, Fianna Fáil and the minister appear to have gone about their business in an unusually low-key manner.

Finance spokesman Michael McGrath talked yesterday about a lack of drama.

Perhaps they are saving their energies for the real battle which will come in the days after the Budget.

Once Tuesday passes, the renegotiation of the confidence and supply agreement will quickly become the only show in Leinster House.

And no doubt Paschal will have his voice back to tell us how prudent he has been.