Taoiseach urges fiscal caution as EU rules tighten and trade tensions grow

Irish Examiner

3 days ago

The Government must be careful with its budgets over the next five years amid new EU fiscal rules and ongoing tariff uncertainty, the Taoiseach has said.
Micheál Martin stated that the Government must ensure it does not increase spending to unsustainable levels, in case of a revenue decline.
New EU rules, known as the medium-term fiscal framework, will restrict governments from making significant changes to their national budgets unless there are major shifts in the economic outlook.
'Both that, and the idea of temporary corporation revenue, and the uncertainty around the tariff talks and the relationship essentially between the US and Europe, means that we do have to be careful about how we map out the budgetary process for the next five years,' Mr Martin said.
However, the Taoiseach identified several key priorities for the coming years, including housing, disability, and child poverty.
This comes as Mr Martin announced that the Government would gradually reduce the student contribution fee over the course of the coalition's term, as the ongoing debate around it continues.
He noted that the absence of a cost-of-living package has impacted all ministers' budgetary allocations for this year.
'Therefore something has to happen in the budget and in the expenditure allocation to enable the level that fees are at, which is currently at €3,000, albeit the special package brought it back last year and the year before,' he said.
'So clearly, ministers have to get provision, not just in that area, but in some other areas as well, to bring it down.'
The Taoiseach said he hoped this effort would begin as part of the Summer Economic Statement process, which is currently underway and will set the spending limits for October's budget.
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