It is too early to know whether rising construction costs will limit the amount that can be achieved under the Government's €116 billion development plan, the Minister for Finance has said.

Paschal Donohoe made the comments at the Budgetary Oversight Committee, which was discussing the Government's economic growth forecasts published on Tuesday.

Earlier this month a report warned that the national children's hospital could end up costing more than €1.7 billion to complete; that compares to a cost of €983m estimated in April 2017.

Meanwhile yesterday Taoiseach Leo Varadkar said the National Broadband Plan would cost €3 billion – compared to an initial projected cost to the State of €500m.

Fianna Fáíl's finance spokesperson, Michael McGrath asked whether there was now a concern that the money ear-marked for the 2018-2027 National Development Plan would not be able to achieve as much as promised when it was first announced.

Mr Donohoe said he was not concerned at the moment, however it was something that his department would need to keep a close eye on.

He said there are inflationary pressures in some parts of the economy, particularly around large construction projects, but it would take some time before the impact of this was known.

He also said that while some elements of the NDP might end up costing more than expected, this could be countered by lower costs in other projects due to tendering or planning delays.

Mr Donohoe also said some of the cost over-runs seen in existing projects could not be blamed on things like labour market pressures. There was also room for higher productivity in Ireland's construction sector, which he said would help curtail cost rises.

Asked about the impact Brexit would have on his department's forecasts, Mr Donohoe said a no deal scenario would push the Exchequer for a projected surplus this year to a deficit.

Over a ten year period this would amount to a deficit of almost 1%, he said. 

This would be due to an on-going change to the trading relationship between Ireland and the United Kingdom rather than a one-off shock and would require a response from the government of the day.

However he said a more immediate concern for his department is the fact that it may have to deliver Budget 2020 while the outcome of Brexit is still unknown.

He said this would require a lot of thought from his department and the wider Government, as well as engagement with the Oireachtas.

When asked if there might be flexibility around the date of the budget's publication, he said they have yet to engage with the European Commission but it does have certain requirements around the timing of national budget submissions.

Fine Gael's Martin Heydon also asked if it was possible to calculate the financial implications of climate change, which the minister had earlier this week cited as a key economic risk for the country.

Mr Donohoe said it was difficult to do this, however it was clear that Ireland's climate change and renewable energy targets were an economic challenge in the medium term.

He said that would go towards framing his thinking in terms of what to do, particularly with regards to carbon taxation.

People Before Profit TD Richard Boyd-Barrett asked whether the minister felt he had shown enough urgency on climate change, as well as issues in housing and the health service.

Mr Boyd-Barrett said that there was no evidence that increasing the carbon tax would tackle the root problem of climate change and said it may become a substitute for doing things that actually make a difference.

He also questioned whether Ireland's industrial policy ran counter to the stated goal of reducing the country's carbon footprint.

Mr Donohoe cited ESRI research which supported the effectiveness of carbon taxation and said he hoped the country would not be facing a situation where parties of the left would oppose using tax measures as a way of changing behaviours.

He also asked Mr Boyd-Barrett to give an example of a country that had successfully reduced its emissions without using a carbon tax.

On the risk of over-spending in some departments, Mr Donohoe said he was taking steps to reduce the risk and scale of this happening in 2019.

Part of this was done by "baking in" additional needs in last year's budget announcement, while he was also holding regular meetings with ministers.

He said he had met Minister for Health Simon Harris twice so far this year, with another meeting planned towards the end of April.

He said health had run under budget in the first three months of the year, but it would be another few months before they had enough data to see if issues were arising.

On property tax, the minister said he hoped to be able to deal with the issue of neighbours paying different rates as part of the planned revaluation and the end of next year.

He said he supported bringing newer builds into the property tax net, but there was no easy way of doing this without causing a sudden jump in the rate paid by older homes.

Mr Donohoe said that two different models had been looked at but their outcomes were likely very different to what might be expected.

He said he expected the overall yield of the property tax to increase following next year's revaluation, but most of this would come from the new homes that were brought into the system.