'Poor budgeting' - Government spending rising faster than expected, warns IFAC
The State's independent financial watchdog has warned that Government spending was rising much faster than planned.
The Irish Fiscal Advisory Council said "poor budgeting" was mostly to blame.
It said current spending is up 6% so far this year, which was well above the 1.4% outlined in the Budget.
It added: "This is because earlier overruns weren't properly built into the latest forecasts."
It said while the Government is running a surplus, if excess corporation tax receipts and recent economic buoyancy were stripped out, there was a structural deficit equivalent to €2,500 per worker.
It also called for the Government to set spending ceilings for each Department as it was legally required to do.
The council was critical of the Government for not setting out any clear plans for a domestic spending rule - which would outline a limit for spending increases.
It said: "With forecasts covering only the next 20 months, Ireland still lacks a proper medium-term fiscal strategy."
It has also called for the Government to use budgetary policy to reduce the ups and downs of the economic cycle.
It said: "This means showing restraint when the economy is strong. It also means providing support when the economy is struggling."
IFAC Chairman Seamus Coffey said: "The Irish economy is in a strong position going into a period of uncertainty."
The council has also predicted that the revenue from corporation tax is likely to increase in the short term.
It said this was due to corporation tax going up for large companies from 12.5% to 15%.
It added that it would also rise as pharmaceutical companies had been excluded from US tariffs so far and exports from drug companies had recently risen significantly.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Journal
15 minutes ago
- The Journal
Taoiseach to attend cross-border business conference today with US trade wars looming
TAOISEACH MICHEÁL MARTIN will meet business leaders from north and south of the border at a conference taking place against the backdrop of economic uncertainty driven by US trade and tariff policies. Martin will address the Joint Business Council All-island Business Conference in Dundalk today. The conference is centred around protecting all-island business in a new global environment, with heightened geopolitical disruption. The event will bring together more than 150 business leaders, stakeholders and public policymakers to focus on the 'interconnected and cost-effective ways that businesses operate on an all-island basis'. The conference is jointly held by businesses representative groups the Confederation of British Industry (CBI) and the Irish Business and Employers Confederation (Ibec). Advertisement They said businesses across the island are eager to see aligned policy support from both the UK and Irish governments that unlocks economic opportunities and broadens the benefits of cross-border cooperation. According to Ibec and the CBI, more must be done to strengthen and future-proof the all-island economy by enhancing collaboration around trade, infrastructure, sustainability, workforce integration, private investment and long-term resilience. Danny McCoy, CEO of Ibec, said: 'The restoration of the North-South Ministerial Council has cleared the way for improved cooperation across the island. 'However, the rise in global uncertainty stemming from US trade and tariff policies and growing geopolitical disruption means the all-island economy must focus on building resilience and deepening collaboration.' Rain Newton-Smith, chief executive of the CBI, said the conference comes at a critical time for businesses across Northern Ireland, Britain and the EU. She added: 'The disruptive impact of tariffs, tax retaliation, and a changing global order has only reinforced the urgent need to strengthen cross-border economic ties on the island of Ireland. 'In the current climate, policy stability and certainty are not optional but are prerequisites for investment in sectors that matter most to both of our economies, from manufacturing and agri-food to life sciences.
RTÉ News
22 minutes ago
- RTÉ News
Entire country could become RPZ under new plan
The entire country could be made a Rent Pressure Zone before the Dáil rises for its summer break in mid-July. It's understood the Minister for Housing, James Browne, is advancing legislative plans to that effect and hopes the measure can become law swiftly. It is anticipated that Opposition parties will their give their support to fast-track the process, even though they vociferously oppose other parts of the Government's rental reforms which were passed by the Cabinet on Tuesday. The change would mean that all tenancy increases would be limited to an annual cap of 2%, or the rate of inflation - whichever is lower. As it stands, roughly a fifth of tenancies are outside of RPZs and therefore are not subject to the 2% cap. A swift introduction of legislation would limit the ability of landlords outside of RPZ's to increase rents beyond the cap limit before the law is changed. After Tuesday's Cabinet decision, Minister Browne indicated that the designation of the entire country as an RPZ would be taken swiftly. Sinn Féin leader Mary Lou McDonald said in the Dáil that the measure should be introduced this week, adding that her party would back the Oireachtas sitting for as long as is necessary to get the job done. The party's housing spokesperson Eoin Ó Broin said the Government is "scrambling around" under pressure from the Opposition. "The department told journalists on Tuesday that the RPZ extension would take place in March 2026. After Opposition highlighted that this would put renters outside RPZs at risk of huge rent hikes, in anticipation of the application of the caps the Government changed the plan and are proposing to deal with this issue more quickly," he said. "We welcome this but continue to insist that the Government scrap the rest of their proposed changes to RPZs as these will lead to a hollowing out of the existing protections and significant rent increases for tens of thousands of renters."
Irish Independent
an hour ago
- Irish Independent
Animals rights group want protection of foxes after ‘grotesque act of cruelty'
Gardaí are still investigating an incident of animal cruelty which has led to outrage among the public over the chilling nature of the cruelty involved. The AOHS called it a grotesque act of cruelty that is testament to the abject failure of current Irish wildlife legislation to protect native animals. It said the 'horrific display' of cruelty in which a decapitated fox was publicly exhibited with its body suspended by rope is not an isolated incident. It also contests the current 1976 Wildlife Act as it offers no meaningful defence against barbaric acts and empowers those with a 'depraved disregard' for animal welfare. 'It is a direct consequence of a legal vacuum that effectively designates the fox as "fair game" for those who revel in inflicting torture and death upon Ireland's only wild dog,' said John Tierney, Campaigns Director for the AOHS. 'This wasn't merely an evil act; it was a defiant exhibition of cruelty, enabled by laws that offer foxes zero protection. It plumbs the depths of animal abuse and highlights the urgent, undeniable need for legislative change. How many more innocent fox hunting lives must be subjected to such atrocities before the Irish government acts?' Mr Tierney added. He said the AOHS 'unequivocally demands' immediate and comprehensive action and a complete ban on all forms of fox hunting while calling for the 'unequivocal inclusion' of the fox under the full protective umbrella of the 1976 Wildlife Act. 'The time for inaction is over. The public outrage generated by this barbaric act must be the catalyst for genuine reform,' Mr Tierney said.
