Brexit will not have impact on the budget, say insiders

GOVERNMENT figures moved yesterday to downplay any immediate negative impact from Brexit on this year’s budget.

Prior to the vote, Finance Minister Michael Noonan had confirmed that Brexit could affect future economic growth.

A €1bn spending boost and tax cut plan is a key part of the government’s plans for this year.

Yesterday Foreign Minister Charlie Flanagan was asked on RTÉ Radio if the spending boost remained on the cards.

He said: ‘It does. But obviously it is subject to the growth rate that was envisaged some weeks ago. Obviously the situation now is somewhat less certain.’

He said meetings especially with the export sector are already taking place, and called for a strategy to minimise any negative impact of Brexit.

Separately a Cabinet source predicted the Government’s plans would not be immediately changed, but the impact will be felt in time: ‘It is very unlikely to affect the fiscal space for this Budget. Your fiscal space is calculated on your recent past economic performance and near future performance, so it takes a few years to impact.’

Questions remain over whether promises made in the Programme for Government can now be met.

One of the first casualties could be the restoration of the Christmas bonus. Figures from the Department of Social Protection show restoring the full amount could cost €267m.