The State’s fiscal watchdog has accused the Government of “poor planning and budgeting” following the release of yesterday’s Summer Economic Statement.
The Irish Fiscal Advisory Council said: “Budget 2025 had planned a €3bn increase in spending. Yesterday, this was revised up by €3.3bn, meaning the actual 2025 increase will be more than double the original plan.”
It added that current spending this year is likely to be €1bn higher than stated in the Summer Economic Statement.
It said when volatile windfall corporation tax paid by multinationals were excluded from the figures the Government was running a deficit of almost €11bn next year.
The Irish Fiscal Advisory Council also criticised the Government for stating that it would have a smaller budget package if the economic environment deteriorated because of the trade war between the US and EU.
It said this approach was the “exactly the opposite of standard economic advice.”
It added: “Countercyclical policy means giving more support when the economy is weak and less when it is strong.”
It said that the government’s budgetary plans were focused on the short term.
It added: “The Government has yet to outline a fiscal framework. It has not set a limit for what it sees as a sustainable pace of net spending growth.”
However, the Irish Fiscal Advisory Council was more positive about the review of the National Development Plan which it said had “ambitious targets” for the coming years.
It said if the plan was well executed it could help address shortfalls in Ireland’s infrastructure.
But it added the last National Development Plan “struggled with timely delivery”.
It said: “Of the 88 large projects we can track that were scheduled for completion between 2020 and 2025, only 77 are now expected to be finished within that timeframe.”
