Chapter 1: What is the main topic discussed in this episode?
The Clare Byrne Show on Newstalk with Aviva Insurance.
Chapter 2: What economic forecast is the government expected to announce today?
Now we're expecting this economic forecast from the government today. We do expect to hear that the Irish economy will keep growing despite what's going on in the world. I'm joined by political correspondent with the Irish Examiner, Louise Byrne. Good morning, Louise. Morning, Clare. So what do we know about the message that we're expecting to hear from government as part of the spring statement?
Yes, so this is kind of a new statement that we're getting from Simon Harris and Jack Chambers after Cabinet this morning. And it's essentially going to lay out where Ireland is financially. Now, as part of this, obviously, the war is continuing in the Middle East and the impact of the war in Iran is having huge impact on the energy prices and fuel prices. and all of these kinds of things.
So as part of the spring economic forecast, Pánaiste Simon Harris, who's also the finance minister, asked officials in the Department of Finance to put together three scenarios to see what would happen kind of in the good, bad and ugly situation, I guess you could say. So what they have come back with is three scenarios. So the baseline scenario, which you would imagine is if nothing
you know, if everything went back to normal, etc., then you have the adverse scenario and the severe scenario. So what we are expecting ministers to be told this morning is that in all of these scenarios... Ireland's economic growth will continue. However, depending on which scenario you're in, that economic growth will just be at a slower rate.
So the Tánaiste are very keen to stress yesterday that, you know, we're coming at this from a good place no matter what happens. But Jack Chambers is also expected to tell ministers at Cabinet this morning with his public expenditure hat on that they also need to control their spending and rein in their spending. So that's a message we've heard before from him.
Whether he will have any impact this time is anybody's guess. But, you know, they seem to be trying to warn them that things might not go as well as is expected.
And Louise, is that message of reining in your spending directed particularly at the Department of Education?
One would imagine so. We obviously know that Hildegard Nocton has defended a near 500 million euro overspend in the Department of Education and said that, you know, when she went into the department in November, it would have been that she thought it was underfunded. And, you know, this has been a long running overspend in the department. It certainly didn't start with Hildegard Nocton.
But Jack Chambers has kind of been steadfast and has warned that if one department is to have an overspend where the money is going to have to be found from other ministers' departments to match it and to kind of try plug the hole. So you would imagine it is very much aimed at Hildegard Nocton. But don't forget, there's been overruns in health. There's been overruns in other departments.
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Chapter 3: How is the ongoing conflict in the Middle East affecting Ireland's economy?
And he will tell his cabinet colleagues that there is a risk of stagflation the longer the conflict in the Middle East goes on. And I think the issue is we're kind of planning in the dark, aren't we? Because we don't really know what's going to happen next with the Middle East. We've had kind of a few false dawns over the last couple of weeks where it looks like it's.
over, it looks like the Strait of Hormuz is going to open and then all of a sudden everything changes. So he is warning that the longer this goes on, the bigger the risk of stagflation, which I think nobody wants to see. But I think on the other hand, you could kind of call it the good cop, bad cop of it all. Jack Chambers is warning about stagflation and that there is a risk of it.
But Simon Harris is saying in any scenario, there will be economic growth. It's just a question of how much or how little there will be. So
I think more information after Cabinet, the two money ministers doing a press conference, I think there will be a lot more clarity later on about just what these scenarios looked at, what they are assuming could or could not happen and what we can expect from Budget 2027 on the 6th of October.
Chapter 4: What scenarios has the government prepared for the economic forecast?
Okay, and despite the big spend to bring the protest to an end, energy supports are back on the table now, put there by Simon Harris.
Yes, this is quite interesting. We were up in Drogheda yesterday for a press conference with Simon Harris at a sod-turning ceremony and he was asked would he rule out the reintroduction of energy credits, specifically energy credits he was asked when he ruled them out.
And he said at this stage, it would be foolish to rule anything out, that we need to kind of keep our powder dry and see what's happening. But he wasn't going to rule anything in or out, which is a little bit of a departure from what we have seen, because a lot of it, in fairness, is dependent on the time of the year that we're in.
And Simon Harris said this again yesterday, an energy crisis in the summertime, like right now, where the days are a little bit brighter, the evenings are a get better weather, thankfully. It's very different from if we were facing this scenario in the wintertime. And at the moment, we just don't know if that's going to be the case.
So whether or not we get to a position where we need the energy credits is probably a question for another three or four months time, but certainly seem to be back on the table in a way that they weren't in the last couple of weeks.
And would you expect there to be a reference to that package of £505 million on top of the £250 million to address the concerns of the protesters? Will that be mentioned in the context of what the budget might look like, the public finances look like at the moment?
I think it will have to because the situation, and we saw this with the crisis in Ukraine when measures were introduced, you had the excise cuts like we have now, etc. They took a couple of years to actually wind back down. So The question is it's €750 million to date. How much higher is that going to get?
1TD and Fianna Fáil told me they wouldn't be surprised if we end up spending €2 billion on these measures over the course between now and the end of the year. So it's going to have to have an impact on the budget. And the Taoiseach said that on the day that this €505 million package was announced that, of course, everything has an impact.
So what the impact of that will be is another question. Simon Harris saying yesterday again in Drogheda that he is determined that there's going to be a personal tax package in budget 2027, that the best way to help people with inflation is by letting them keep some of their money.
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