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IRELAND’S FISCAL WATCHDOG has said that some of the measures taken in the Budget can be “explained by the fact we are so close to a General Election”.
The Irish Fiscal Advisory Council (IFAC) was established to offer an independent view of how the Government manages its budget” and yesterday published its first read on Budget 2025 yesterday evening.
It slammed the Budget and called for the Government to be “more serious” instead of “repeating past mistakes”.
The Budget amounted to €9.1 billion, a substantial increase on Budgets seen in the pre-Covid era – in 2019 and 2020, the Budget package was €3.8b and €3.6b respectively.
Speaking on RTÉ’s Morning Ireland, IFAC chair Seamus Coffey said “you have to take into consideration that these decisions are made in a political environment”.
“Maybe some of that lack of a medium and long-term view can be explained by the fact that we are so close to a General Election,” he added.
“There’s no doubt that in Ireland, we have issues with the political and economic cycle not going hand in hand,” said Coffey.
The IFAC chair also said there were “two Budgets” announced on Tuesday, as there were “reasonable” measures for 2025 but also “as many announcements for 2024”.
He said Government spending this year has “increases pretty dramatically for two key reasons”.
Coffey said the first reason was that “maybe the number set out last year didn’t have that credibility, and there was likely to be overruns”.
He noted that there have been “significant overruns in health, already up over €1.5 billion and possibly likely to be larger before the end of the year”.
The second key reason he pointed to was the almost €2 billion of new spending measures introduced in the Budget for 2024.
And while Coffey said there’s “no doubt the Government should respond to the inflationary environment”, he questioned cost-of-living supports being described as “once-off” when some have happened for three years in a row.
He also said that when such measures are introduced, particularly for low income families, they “should be repeated again next year, so we should be considering these to be permanent, not these one off measures”.
Coffey also criticised many of the cost-of-living supports for being universal and untargeted.
“The €250 energy credit for just over 2 million households, that’s spending of €500 million over a very short period of time when it comes to the budget,” said Coffey.
“The Government should be responding to the increased inflation we’ve seen recently, but it should be doing so on a more permanent basis, particularly for low-income households.
“These figures should be built in again for next year, but they’re not in the figures.
“So from a credibility perspective, it’s likely we will see announcements next year to fill the hole that these once-off measures, if they’re withdrawn, would make, so they will be paid again.”
Tánaiste Micheál Martin yesterda said he “takes some issue” with IFAC’s analysis.
“Are they seriously suggesting that the Future Ireland fund is not a serious effort for the future?”
The Future Ireland Fund aims to deal with future recognised expenditure pressures including an ageing population and climate change.
A separate Infrastructure, Climate and Nature Fund seeks to assist with climate change objectives and nature, water quality and biodiversity issues.
However, Coffey said the contribution to those funds this year will be around €4 billion, against the “estimated exceptional corporation tax receipts the government will collect this year is €15 billion”.
Coffey said this figure would be just over €6 billion next year but that the “excess corporation tax receipts are far larger than that”.
“There’s no doubt that the Council welcomes the fact that the government has introduced these funds,” said Coffey, “but the scale is lacking in terms of the amount of money that’s being collected.”
Coffey also noted that corporation tax is “not coming from the domestic economy and the bulk of it is paid by multinationals who are here to service international markets”.
“If the government takes this corporation tax money, in the main from US multinationals, and pumps it into the economy and stimulating demand, there’s absolutely no case for fiscal stimulus in the Irish economy,” said Coffey.
“Our economy is in a very good position, but if the government pumps even more money into an economy in that position, you’re just going to drive up domestic inflationary pressures.
“We’ve seen problems in the past where we have had stimulatory budgets, with the Government adding to demand in an economy that’s performing pretty well, so I think we should take that seriously.”
Coffey added that IFAC recognises that the economy is in a very strong position but said that “you should be running a surplus in those instances”.
“But given the government’s own figures, if we take out this excess level of corporation tax, there’s a pretty significant deficit there of €6 billion.
“At a headline level, things look pretty strong and a lot of this is sort of a good problem to have but when it comes to the impact on the economy in underlying terms, we’re actually running a pretty large deficit.”
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We have the other extreme here. Damned if do. Damned if you don’t. The fact is heroin destroys families. They should of thought of that when selling the horrible stuff.
You’ll find that the majority, if not all, these inmates have come from broken homes and deprived communities where they sold drugs to survive. It’s nasty and yes they were part of the cycle that they themselves were trapped in but Obama is acknowledging that solution involve them; much in the same way Mo Molam knew the peace process in NI had to involve inmates in British prisons.
Why is Obama doing this at the end of his term instead of at the beginning? The US prison population stands at over 2million. That’s more than China has incarcerated. It’s almost 2.5 times more than Russia has in prison.
the vast majority of prisons in the US are privately owned, run foe profit and care more about the bottom line than society. barry is an actor..reading off a script and being told what to do, as badly as drugs have messed up parts of society unpunished white collar crime and the burden it has put on society has damaged it a lot more.
in america there is a prison industrial complex,,,,,,,,,,,,,,,,thats the problem.
here there are yobos with 17 previous convictions walking free and committing more serious crimes because the justice system is far to lenient on them. the legal system does not mind, its a big cash cow for them.
Obama is a good actor and that’s all. It is well established fact that since he took office his administration has refused more freedom of information requests than other other administration in US history. And if he gave two shits about ‘non-violent crimes’ then he’d have long arranged for Snowden to come home and would have intervened in the Bradley Manning case as he could have done at any time.
He’s a liar, and has done nothing but further liberalise US laws (which is why most of these guys are in prison in the first place).
Hilary Clinton is far worse than he and if she makes it in it’s bye bye US.
OK idiot. Restored pride to US after years of Bush’s wrath. A true statesman. Agree with you about Hillary though. I hope Sanders wins
Try making a point like an adult and I might respond to you. Other than that. Take a hike.
you just replied to him.
My heart is bleeding purple piss reading the sob stories.
If anything our Judiciary here could learn a thing or two from US Judges about sentencing and the whole US legal system.
Instead of having Solicitors and Barristers they have just one set Lawyers who deal with your case from start to finish. Where there is a dedicated Prosecution Service staffed by full time Prosecution Lawyers and a dedicated Public Defenders Office staffed with full time Defence Lawyers for those that would normally get free legal aid here. And then Private Legal Firms for those that can afford them.
Yes because there is so little crime in the US compared to Ireland.
Funny how you, a prison officer, propose following almost every part of the US save the mass privatization of prisons, wonder why that could be, oh right, self interest.
Wari.
Simply because Privatised Prisons have been shown time and time again to be an utter disaster in terms of security and staff safety. One only has to look at our nearest neighbour to see just how much of a bad idea they are and why the rest of Europe are not following suit. In reality they actually cost the state more than those under Government control in the long term.
I’m all for criminals doing time for their crimes especially violent or sexual crime but some of the sentences for carrying a small amount of drugs are ridiculous. Check out the segment John Oliver did on it, it’s a real eye opener. When I think of the idiot I was as a teenager, I would hate to go to jail for 15 years because of being on idiot.
I didn’t deal drugs! lol
If the sale of illegal substances was legalised and regulated then a lot of these places would see a massive reduction in crime as the people relying on the drug trade to make a living would be forced into tax-paying, gainful employment as they could not compete with a well regulated, safe industry. Also, not only would we gain the tax from the legal sale of drugs, it would be much easier to ensure the quality and safety of such substances as they could be tested in proper labs before being passed onto the public. It doesn’t take a genius to see that the head in the sand approach just doesn’t work. As long as there is a clear demand for drugs, there will always be people willing to risk everything to meet that demand for massive tax free profits.
In fact the Americans have the right idea here. Conspiracy to distribute heroin is no small crime. In my opinion 15 years is entirely appropriate. Crime must be punished harshly or we are all doomed.
They should do more about guns than 1000 year prison terms
How about maybe not dealing heroin. Heroin is a violent drug as is most other drugs. And yes that includes Weed. So just because the initial deal was violent… what we should let them away. The Americans have the right way. Full length senences for federal offences. If we could adopt there legal court room system this country would be a hell of a lot better off.
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