Fianna Fáil leader Micheál Martin has rebuffed Taoiseach’s Leo Varadkar’s appeal for talks on an extension of the Confidence and Supply for up to two years, saying he will only enter talks towards the end of the year, as specified in the original agreement.

Last week the Taoiseach wrote to the Fianna Fáil leader seeking early talks on an extension of the agreement in the interests of stability during the Brexit negotiations, in a letter Mr Varadkar published this morning.

However, Mr Martin told the Taoiseach he will not open talks on an extension before the budget.

Mr Martin said he will abide by the terms of the original agreement, and review its operation, with the possibility of an extension at the end of this year.

In his letter, Mr Martin said that he does not “see a reasonable basis for the statement in your letter that ’government cannot function if it does not know if it will last from week-to-week or month-to-month’.”

“This has no grounding in our Constitutional system and was not raised as an issue when the arrangement was negotiated. Indeed it would be extraordinary if we were to agree that Ministers could not be expected to do their jobs without advance assurance of a compliant Dáil,” Mr Martin wrote.

The confidence and supply agreement which underpins the current minority government was agreed between Fine Gael and Fianna Fáil in May 2016 and effectively ends after Budget 2019 this October, with a review process to follow thereafter.

Budget talks

The parties are scheduled to begin talks on the budget on Wednesday. Key issues to be addressed include the housing crisis, taxation and health funding.

However, while Government has an overall budgetary spend of €3.4 billion for the coming year, some €2.6 billion has already been committed, which leaves about €800 million to spend.

Letter from the Taoiseach to Micheál Martin

Letter from Micheál Martin to the Taoiseach

I wrote to the leader of Fianna Fáil last week seeking to open negotiations on an extension to the Confidence and Supply Arrangement and an agreed election date in Summer 2020. In the letter I set out the ambitious programme of work we want to achieve over the next 2 years.... pic.twitter.com/DxZR6JQHD6 — Leo Varadkar (@campaignforleo) September 4, 2018

But given the commitment under the programme for Government to have a minimum 2:1 ratio of investment versus tax cuts, this reduces to just about €265 million available for tax cuts.

In his letter to Mr Martin last Friday, the Taoiseach says much had changed since the agreement reached in April 2016, including the UK’s impending exit from the EU and the power-sharing collapse at Stormont.

The economy continues to grow alongside “concerns about overheating with growing downside economic risks due to international developments”, he wrote.

However, despite record levels of spending, the State is struggling to make improvements to healthcare while the housing crisis persists, Mr Varadkar adds.

“Without doubt, there is more to do. It is my strong view that a government cannot function or work in the interests of the people if it is living on borrowed time... Such uncertainty weakens our hand in Brexit talks, domestic negotiations, and of course those opposed or resistant to reform are simply more likely to wait us out.

Mr Vardkar argues such a scenario “would not be in the interests of citizens, taxpayers, or users of our public services,” adding that in the interests of certainty the two parties should agree on a general election date for the summer of 2020.

“I am ready to appoint a team to commence negotiations immediately”.

Fianna Fáil’s Justice spokesperson Jim O’Callaghan said his party would not enter negotiations to extend the Confidence and Supply agreement with Fine Gael until after Budget 2019.

It would be “completely illogical” and would make “absolutely no sense” for Fianna Fáil to agree to extend the Confidence and Supply agreement prior to any agreement on Budget 2019, he said.

To do so would leave Fianna Fáil with “no tool” in their negotiations on the Budget, he told RTÉ’s News at One.

“My view is that Leo Varadkar wants an election in October or November and that’s why he’s trying to get out of the Confidence and Supply agreement.”

He said it was unusual for a four page letter to be drafted for the media. It was a distraction and was creating instability.

Minister for Justice Charlie Flanagan said he does not subscribe to speculation about an early election and does not believe the electorate wanted an election.

Fianna Fáil spokesman on communications Timmy Dooley described said discussions about the extension of the confidence and supply agreement were a distraction from issues such as the housing crisis and the health service.

Once the upcoming budget has been implemented, then talks on extending the agreement should begin, he said.