TDS HAVE BEEN warned that the planned spending by this Government is far above the EU average and above an “appropriate level”. 

The warning comes from the State’s financial watchdog, the Irish Fiscal Advisory Council (Ifac), which will appear before the Oireachtas Budgetary Oversight Committee this morning. 

The watchdog has warned that Ireland will be left in a “vulnerable position” as a result of the Government’s plans to run smaller surpluses in the coming years.

As part of its review of the Government’s revised Medium-Term Fiscal and Structural Plan (which was submitted to Ifac late last year), the watchdog warned that if the plan is taken at face value, net Government spending is expected to grow at a faster rate than the economy, which will lead to economic vulnerability. 

The Medium Term Fiscal Plan sets annual limits on how quickly government
spending can grow.

On the forecast spending growth, Ifac said the pace set out in the plan is “much faster” than in any other EU Member State, and noted that spending growth is faster than Ireland has implemented historically.

The average net spending growth rate of all EU countries is 3.9% over 2025-2028.

The growth rate of spending in Ireland is planned to be almost double the average of other EU countries at an average of 7.1% over 2025 to 2030.

In Ireland, spending in 2030 is forecast to be 50% higher than it was in 2024 and more than double the level of spending in 2019. 

Ifac has also raised concerns about whether the Government will stick to the spending parameters it has set itself, noting that in recent years it has not. 

“Even when looking only one year ahead, spending has gone significantly beyond what was budgeted for. Spending in 2025 was €3.9 billion higher than budgeted for.

“It remains to be seen if the Government will stick to this multi-year plan for spending,” Ifac said. 

The watchdog said that given that the economy is already performing well, it does not need support from fast increases in government spending.

It warned that there are “predictable” costs coming from an ageing population and climate change, but said despite its warnings, the Government can still responsibly commit more resources to solving present-day issues such as Ireland’s infrastructure. 

It said this could be done by making choices between increasing investment, increasing day-to-day spending and cutting taxes.

It also said that if the Government chose to run bigger surpluses today and made large contributions to its savings funds, the country would be better prepared for future challenges.