Irish Government Spending Jumps 54% Since 2019, Fiscal Council Warns of Overruns

Irish government spending increased by 54% since 2019, rising from €86.9 billion to €133.8 billion last year. The Irish Fiscal Advisory Council (Ifac) reports the Government exceeded its annual spending target by an average of €5.1 billion in each of the last three budgets.

While population growth, aging demographics, and inflation contribute to this increase, Ifac attributes a significant portion to «bad planning» and «poor expenditure management.» Corporate tax receipts, which reached a record €33 billion last year (double 2021 figures), have masked this spending surge.

Minister for Finance Simon Harris and Minister for Public Expenditure Jack Chambers have promised a «fundamental change» with a new 6% spending rule. They pledged to limit the annual increase in public spending to 6% for the next five budgets, tapering from 7.2% this year to 5.2% in 2030. Chambers has warned departments to control spending and plans enhanced oversight.

Despite these pledges, Ifac warns that day-to-day public spending overruns are likely to exceed €1.1 billion this year, with current spending up 6.8% and significant overruns in health. Corporation tax generated €7.5 billion in June, slightly up from last year, with the first significant payments from the new 15% global minimum rate expected next month.