Another Coalition showdown is looming as Fine Gael targets one-off welfare cuts in the Budget, writes John Drennan.

The finance ministers, Paschal Donohoe and Jack Chambers, announced a €9.4bn package of spending and tax measures in the Summer Economic Statement.

But there have already been public spats between Fine Gael and Fianna Fáil over the limited €1.5bn earmarked for tax cuts. The bulk of this would be eaten up by Fine Gael's demand to reduce the VAT rate for the hospitality sector.

Last year, Fine Gael held the Social Protection portfolio, and then minister Heather Humphreys was able to announce more than €1.4bn in one-off reliefs as part of a cost-of-living package. Now, the party intends to target that department - currently under Fianna Fáil Minister Dara Calleary - for cuts.

Public Expenditure and Reform Minister Jack Chambers is lining up an autumn tour of departments to seek further cutbacks ahead of the October 7 Budget. And one senior Fine Gael source told the Irish Mail on Sunday: "There are going to be some very serious divisions about welfare.

"There will be a hunt for low-hanging fruit, and there is a lot of that in Social Protection.

"Over €1.4bn in one-off payments, two dole bonus payments a year -- that's €700m a year. Two extra child benefit payments; that's €371m a shot.'

However, one Fianna Fáil minister added: "Sure, all that was brought in by Heather Humphreys."

Humphreys -- now being touted as potential Presidential candidate in the wake of Mairéad McGuinness's shock withdrawal from the race for the Áras -- served as Social Protection minister for three years in a row; and last year delivered the largest welfare budget in the history of the State.

This was driven by huge one-off lump-sum payments, which are discretionary and not built into the department's long-term spending plans.

In Budget 2025, these came to €1.4bn, supplemented by a further €1.2bn in permanent increases.

A Fine Gael source said: "It's a Fianna Fáil ministry now, so all that spending is fair game. We have our own people to look after.

"There is nothing personal here. [Minister] Dara [Calleary] is a nice fellow but he's burning through taxpayers' cash, even when the inflation crisis is over. We are just firing a warning shot."

One minister warned: "How can we justify having struggling SMEs not being bailed out while others can be on the dole for decades and their terms and conditions only improve?"

Another source said "a bit of a guerilla war has already started with capable backbenchers asking serious questions over waste and overspending. Don't tell me that isn't being encouraged by leadership or there won't be more of it."

This was a reference to Fine Gael TD John Paul O'Shea calling on the Department of Social Protection "urgently review and update their Compliance and Anti-Fraud Strategy to ensure it is fit for purpose".

The Cork North-West deputy's statement -- which would have been approved by party HQ -- after it emerged the department made overpayments of more than €673m between 2018 and 2023. It has since recouped €480m of this.

O'Shea is also expressed concern that, despite Ireland's "full employment" status, "over 30,990 current recipients of Jobseeker's Allowance have been unemployed for more than two years".

One Fine Gael minister noted: "There is a sense that we don't represent 'our' people anymore. That has to stop."

Photo: Jack Chambers and Paschal Donohoe. (Pic: Leah Farrell/© RollingNews.ie)