IFAC criticises Ireland's budget plans
In its assessment of the newly released Summer Economic Statement (SES), the independent watchdog warned that the government's intention to reduce the size of the 2026 budget package if global trade conditions deteriorate is a serious misstep.
IFAC argues this approach runs counter to standard economic advice, which calls for countercyclical policy: increasing support when the economy is weak and scaling back when it is strong.
'This is exactly the opposite of standard economic advice,' the Council said, warning that the government's strategy could leave the public finances dangerously exposed.
The criticism has been echoed by Barra Roantree, assistant professor of economics at Trinity College Dublin, who compared the current strategy to the fiscally reckless policies of the early 2000s.
'Committing to ramp up current expenditure if the good times continue, but row back if things get worse, is precisely the sort of pro-cyclical policy that the current minister for finance has himself said we should avoid,' he said.
Roantree warned that this policy risks stoking inflation and could leave Ireland vulnerable to sudden declines in corporation tax receipts.
If that happens, the government may be forced to abandon capital investment projects, even if they are already promised.
Originally, the government planned to increase spending by €3bn in 2025.
That figure has now been revised up by €3.3bn, bringing total expenditure to €108.7bn.
But IFAC says that even this may underestimate how much the state will actually spend. Based on spending patterns from the first half of the year, the Council believes current expenditure could end up around €1bn higher than reported.
The Council also warned that this year's overspending is likely to spill into 2026.
'This all points to poor planning and budgeting,' it said.
Finance Minister Paschal Donohoe has also announced a €1.5bn tax package for the upcoming budget, including a controversial proposal to cut the VAT rate for the hospitality sector from 13.5% to 9%.
Roantree described the cut as 'an expensive and economically illiterate policy' that will limit the government's flexibility going forward.
Despite a strong economy, the government is forecasting a deficit of nearly €11bn next year, which equates to 3.2% of Gross National Income (GNI) once windfall corporation tax revenues are taken out.
IFAC has repeatedly criticised the lack of a long-term fiscal framework and says the government still hasn't defined a sustainable pace of net spending growth.
One of the few areas where the Council was more positive was the National Development Plan, which it said has 'ambitious targets' that, if executed properly, could help address Ireland's infrastructure deficits.
Of the 88 large-scale projects originally scheduled for completion between 2020 and 2025, just 77 are now expected to finish on time.
See More: Economy, IFAC, Infrastructure, NDP, SES
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Agriland
3 hours ago
- Agriland
Paperwork pressure tops Irish farmers' concerns
Irish farmers are facing unprecedented levels of bureaucracy, with 60% naming rules and regulations as their biggest challenge, according to the IFAC Irish Farm Report 2025. This concern outranks even rising input costs (54%) and weather unpredictability (48%), highlighting the growing administrative burden on the sector. From Bord Bia Quality Assurance to Common Agricultural Policy (CAP) scheme requirements, farmers are expected to keep meticulous records on everything from animal remedies to feed purchases, herd movements, and farm safety checks. While these regulations are intended to maintain high standards and secure market access, the sheer volume of paperwork is eroding valuable on-farm time. In recent years, compliance demands have multiplied: Scheme participation: Each grant or payment from BISS (Basic Income Support for Sustainability) to TAMS (Targeted Agriculture Modernisation Schemes) comes with detailed documentation and strict deadlines. Bord Bia audits: Farmers must produce complete up-to-date records instantly during inspections. Farmers must produce complete up-to-date records instantly during inspections. Environmental requirements: Nitrates derogation limits, water quality measures, and climate action plans all require accurate logging of inputs and outputs. Without an organised system, these records can become scattered across paper files, notebooks, and spreadsheets, making audits a source of stress and, in some cases, financial penalties. Falling short on paperwork does not just mean a bit of extra hassle. It can delay scheme payments, lead to grant penalties, or even put a farm's quality assurance status at risk. For farmers relying on these payments to keep cashflow steady, a small oversight can turn into a major headache. That is why many are now looking for ways to bring all their records under one roof, preferably in a format that can be updated on the go, not just at the kitchen table after dark. This is where Herdwatch has been gaining ground. Instead of shuffling through binders and boxes of receipts, farmers can log their records on a phone, tablet, or computer as they go. Here is how it changes the game: No more backlogs: Treatments, feed purchases, calf registrations - enter them instantly while you are still in the yard Treatments, feed purchases, calf registrations - enter them instantly while you are still in the yard Audit in minutes, not hours : Generate a full report for an inspection at the click of a button, with no need to hunt for old files. : Generate a full report for an inspection at the click of a button, with no need to hunt for old files. One place for everything : From breeding records to safety checks, it is all stored securely in the cloud. : From breeding records to safety checks, it is all stored securely in the cloud. Works with farm tech: If you use EID readers or weigh heads, the data flows straight into Herdwatch without extra typing. Co. Galway suckler farmer Donal Canniffe. Source: Herdwatch For many Herdwatch users, the biggest benefit is simple - peace of mind. One of them is Co. Galway suckler farmer Donal Canniffe, who has found that the app takes much of the sting out of red tape and makes compliance far less of a headache. He said: 'Before Herdwatch, the thought of an audit was enough to cause serious stress. "Now, with Herdwatch, getting ready for an audit is the easiest part of the job.' That confidence is worth a lot in a sector where rules are tightening and inspections can be unannounced. The IFAC report makes it clear: Irish farming is battling a paperwork overload. But with the right tools, compliance does not have to be an energy drain. Herdwatch offers farmers a way to stay on top of regulations without sacrificing time, accuracy, or peace of mind. Join over 20,000 farmers across Ireland and the UK simplifying farm paperwork and improving farm performance.
Irish Times
10 hours ago
- Irish Times
AI needed to help Ireland's infrastructure withstand climate disasters
A powerful set of available AI tools will help improve the resilience of much of Ireland's ageing infrastructure, which is increasingly exposed due to increased floods, storms and other climate-related disasters, according to consultancy firm Deloitte . The newly reviewed National Development Plan (NDP) 'offers a once-in-a-generation opportunity to future-proof Ireland's infrastructure' but AI needs to be widely deployed, said Stephen Prendiville, Deloitte Ireland's infrastructure and sustainability lead. He was commenting on a global report published on Wednesday, which finds AI-enabled infrastructure resilience could help prevent about €65 billion in annual damage worldwide by 2050 – about 15 per cent of projected global losses due to natural disasters. A specific figure for Ireland is not given. With €275 billion planned in the NDP through to 2035, Mr Prendiville said, 'we have the capital needed. We now need to move forward at pace, with smarter planning and data-driven decision-making. AI is rapidly transitioning from being experimental to being an important part of the solution. READ MORE 'With the right vision and collaboration, [AI] can help leaders build infrastructure that's stronger, more efficient, more sustainable and future ready, helping ensure future disruptions are less severe or can be more easily mitigated,' he added. The report by Deloitte's Centre for Sustainable Progress outlines how AI technologies can play a role at every stage of infrastructure life cycles, from planning and prevention to 'rapid post-event recovery'. In urban and regional planning, AI-powered digital predictive models can now support better land use via land elevation data, soil saturation and urban density, it finds. Meanwhile, machine learning can power early warning systems for floods, helping authorities reduce human and economic impacts, while AI-enabled inspection tools can speed up damage assessments and accelerate infrastructure repair, minimising costs and economic disruption, the report says. From storm-related power outages to repeated flooding, Mr Prendiville said Irish infrastructure was increasingly vulnerable to climate impacts. 'New stresses are now also emerging with more extreme temperatures being experienced as a rule in summer and winter.' [ Climate scientists to receive €2.8m for flood future-proofing projects Opens in new window ] A Deloitte survey warned earlier this year that climate change could cost the Irish insurance industry up to €1.5 billion over the next decade, driven by more frequent extreme weather events. 'We found the availability and rising cost of reinsurance was one of the biggest challenges for Irish insurers offering flood-risk cover,' said Noel Garvey, an actuary with Deloitte Ireland. 'If AI, predictive analytics and shared climate intelligence can give governments, scientists, insurers and services the foresight to act earlier, respond faster and recover more effectively, it can turn what are often devastating losses into more manageable challenges, keep more people safe and costs down,' he added. Technology and data were as critical as physical flood defences in protecting against extreme weather events, he said. Storm Éowyn earlier this year resulted in insurance claims of more than €300 million. 'The cascading impacts of persistent power failure, exacerbating the lack of water and telecom service during this time, must be a wake-up call for authorities when it comes to the resilience of our infrastructure,' Mr Garvey said. 'Met Éireann has already set out its ambition to move beyond broad, countrywide weather alerts and towards more localised, geo-specific warning systems,' Mr Prendiville added. 'With the integration of AI and enhanced data and analytics, these forecasts could be made far more precise.'
The Journal
19 hours ago
- The Journal
Environmentalists urge Kildare County Council to refuse planning to €3bn data centre
FRIENDS OF THE Earth Ireland, An Taisce and Friends of the Irish Environment (FIE) have called on Kildare County Council to refuse planning permission to a planned €3 billion data centre due mainly to the increased greenhouse gas emissions it will produce. In August of last year, multimillionaire engineering entrepreneur and co-owner of Monaghan-based forklift manufacturer Combilift, Robert Moffett's Herbata Ltd, lodged plans for the six data centre campus for a site next to the M7 motorway and business park at Naas, Co Kildare Last October, the Council stalled the plan after stating that the projected CO2 emissions from the data centre campus on lands in the Jigginstown, Halverstown and Newhall areas of Naas represents 49.35% of the 'Sectoral Emissions Ceiling' for the entire Commercial Built Environment Sector to 2030. The Council stated that the level of emission is 'excessive' for one development. In June, Herbata lodged extensive further information on the scheme in response to the Council concerns pointing out that the data centre will not be reliant upon the existing electricity generation and will get 50% of its power from renewables. Consultants for the applicants, RPS stated that the utilisation of Combined Cycle Gas Turbines (CCGT) would result in a consequent reduction of 552,000 tonnes in greenhouse gas emissions However, in new submissions ahead of a Council planning decision this week, Friends of the Earth Ireland, An Taisce and FIE call on the Council to reject the plan while County Kildare Chamber has urged the planning authority to grant permission. On behalf of FIE, director Tony Lowes stated that FIE strongly oppose the proposed development of six gas-powered data centres due to their projected high greenhouse gas (GHG) emissions and incompatibility with Ireland's climate obligations He stated that the development 'could emit nearly one million tonnes of CO₂ equivalent per year. Over five years, this would account for almost a quarter of Ireland's electricity sector carbon budget – posing a major adverse impact on national emissions targets'. Advertisement Lowes adds that 'the mitigation measures proposed, such as Corporate Power Purchase Agreements (CPPAs), the potential use of biomethane or hydrogen, and future district heating, are either mismatched, unreliable, unproven, or dependent on fossil fuels'. On behalf of Friends of the Earth Ireland, campaigns director Jerry Mac Evilly stated that 'the central message of this submission is that the applicant has not clearly or sufficiently addressed significant emissions impacts of the six gas-powered data centres. 'We therefore call for the application to be rejected,' he said. He said that 'the proposed data centre's extremely high associated emissions directly conflict with legal obligations to reduce emissions under the 2021 Climate Act and would undermine national decarbonisation efforts'. On behalf of An Taisce, senior planning and environmental policy officer Phoebe Duvall has told the council that to grant permission 'would be in contravention of Ireland's legally binding emissions reduction obligations and contrary to the national climate objective'. In a submission on behalf of County Kildare Chamber, CEO Sinead Ronan has told the council that 'this project represents a significant and timely investment in Naas and the wider Kildare region, delivering multiple economic, environmental and infrastructural benefits'. Ronan stated that 'the revised proposals submitted in response to the request for further information highlight several key enhancements'. She said: 'Notably, the data centre will not draw power from the national grid. Instead, only a minimum of 50% of its energy demand will be met through on-site solar PV generation or renewable energy sourced via Corporate Power Purchase Agreements (CPPAs)'. Ronan stated that 'this proposal presents a forward-looking opportunity to enhance the local economy, support employment and position Kildare as a leader in sustainable digital infrastructure. 'The project also has a clear alignment to planning policy, climate goals and heritage protection'.
