Who is Donohoe’s warning directed at?

FINANCE Minister Paschal Donohoe is telling colleagues not to be talking up the Budget. Wise advice, given the resources available. But politics abhors a vacuum and ministers in this mixed bag Government will doubtless be jostling for position to claim credit for whatever scraps are being thrown from the table. Budget 2018 will be announced on October 10. Earlier this year, the Government estimated there would be extra resources worth €1.2bn available in the Budget. However, the knock-on effects from last year’s budget and additional spending on public services will leave as little as €300m to ‘splurge’. Not a lot of room for manoeuvre there. The Irish Tax Institute’s annual pre-Budget briefing always provides insightful food for thought as the organisation is not lobbying like every other interest in town at this time of year.

Instead, the tax professionals’ body seeks to set out facts and figures to inform the debate and ensure issues like the broadening of the base don’t fall off the radar.

Budget 2018 is the first for Mr Donohoe as Finance Minister and Leo Varadkar as Taoiseach, so the mythical and mystical people who get up early in the morning are expected to figure prominently.

The ability to give something back to these middle-income earners is limited. Even a quite modest adjustment to the entry point for the higher rate of income tax would swallow up the bulk of the money available to spend and deliver a modest return of about €4 a week for the average middle-income earner.

When Mr Donohoe warns not to talk up the Budget, perhaps he needs to look at his boss across the table.