Full coverage: Budget

Paschal Donohoe has been involved in crafting the last eight budgets. In a major interview, he addresses the risks of fuelling inflation and baking in non-core expenditure, his change of heart on mortgage interest relief and the limits to health spending.

Minister for Finance Michael McGrath has just unwrapped a €14bn budget package. In an in-depth interview, he explains the political and economic philosophies that underpin it.

We have the money to do something about infrastructure, climate change and ageing, and that much must be celebrated, even as its allocation under a coherent plan is yet to come.

People wanted short-term measures to assist with rising costs in the knowledge that the tax receipts that support them could well evaporate. And that contradiction underpinned Budget 2024.

In a perfect illustration of coalition politics, Budget 2024 allocates some windfall corporation tax to future current spending, some to the stability of capital expenditure, some to green policies - and most to an immediate giveaway.

As corporation tax receipts fall below forecasts, the largest payments yet to come this year will determine the new trend after years of runaway growth.

Prolonged high inflation is "incredibly socially divisive and economically very injurious," says Minister for Public Expenditure and Reform Paschal Donohoe ahead of the budget. This theme threads through all others discussed in his interview with The Currency last week.

The chance to be transformative for the nation is rare for any individual or group. Ministers for finance get a go at it every year. This may be the last budget that can be ambitious in structural terms for some time to come and it is too good a chance to waste.  

We need to move beyond the short-term obsession and the archaic constraints of our traditional budgetary approach. We need to make and win the case in Brussels for splitting the capital budget from the current budget, and to fund the former separately.

There is little evidence to suggest that the corporation tax bounty will dry up. But with the budget approaching, it is politically useful for the budgetary ministers to voice their concerns and show their caution.