Brexit has been described as a frightening and cataclysmic meteor hurtling towards Ireland by Josepha Madigan, Minister for Culture, Heritage and the Gaeltacht.

Speaking at the Kennedy Summer School in New Ross, Co Wexford, she said there would be “very little wiggle room” in the imminent budget because of the scale of threat facing the island.

“Nobody knows the permutations of Brexit,” Ms Madigan said.

“It is cataclysmic in my view, a meteor that is hurtling towards this island. It is quite frightening.”

Ms Madigan said Fine Gael would be “trying to buffer against the impact of Brexit” in next month’s budget.

“You have to make sure there is money in the coffers, because if there is another economic shock, we don’t want be in a situation where unemployment is at 16 per cent again.”

Referring to her party’s preference for a €2.5 billion “rainy day fund”, Ms Madigan said it was not a time for “voodoo economics” but “a time for calm heads and prudent economics”.

Plans for a “rainy day fund” plan have been backed by Fianna Fáil.

Michael McGrath, Fianna Fáil’s finance spokesman, told the summer school that everything is “completely up in the air” ahead of any deal being hammered out on the UK’s decision to leave the European Union.

“It is essentially outside the control of the Irish Government, ” he said.

“They can only do so much putting forward the Irish case. The solidarity from our European partners to date has been very strong...there has been no chink in that, I think they will stay the course with us and that gives some comfort.

“But to have a ball hanging in the air and not knowing where it is going to land in relation to something as fundamental as our relationship with our biggest trading partner, our next door neighbour, it is scary in many respects.”

Mr McGrath said the budget would have to cognisant of that, and should focus on homegrown companies, particularly smaller and medium-sized enterprises.

“That is one of the life jackets we have at our disposal as we face into Brexit,” he said.

Mr McGrath also called for some changes to income tax. Doing nothing would be tantamount to a de facto tax increase as people tip into higher tax bands with rising salaries, he said.

But he signalled broad support for a prudent approach.

“At a time when Ireland has an economy that is nearly at full tilt, we have had more tail winds than head winds, when the challenges hanging over us are likely to lead to developments that are adverse rather than favourable, it is not a time to put your foot on the accelerator,” he said.

“We have to be cautious . . . fasten our seatbelts and hope that Brexit ends up better than any of us hope it might.”

Former minister of state and Social Democrats co-leader Róisín Shortall said the threat of hard border on the island was “unfortunately becoming more likely”.

“We still haven’t been able to square that circle,” she said.

“Nobody has come up with a solution to that. So I think it would be prudent if the government was more active in terms of making provision for that awful eventuality of a hard border.”

She added: “Unfortunately that is beginning to look like a very real prospect.”