>IFAC says Government needs to move away from year-to-year budgeting.
>Moving to multi-annual budgeting would give government agencies more certainty over their future funding, it says. This would aid better planning and delivery of public services.
>The Irish Fiscal Advisory Council says the share of corporation tax which is being saved will drop from 32% this year to 15% in 2026.
>The watchdog warns that spending is set to grow by over 11% in 2025 which it described as “much faster” than was sustainable.
So common sense recommendations that will fall on deaf ears
Ireland has become increasingly populist economically.
The give away budgets need to be stopped and a sensible conversation on welfare and migration spending needs to be had.
We can’t fund the unproductive indefinitely, there needs to be a fair balance.
We don’t have a single political party who are demanding that we reduce spending and save more for a rainy day. In fact most of the opposition parties would say we have ‘austerity’, and need to spend much much more.
IFAC are giving sound economic advice for the long term. But the political system does not give a feck about the long term.
The trend in budgets is fairly easy to follow surely.
In the first year or two after an election the ordinary punter gets nothing and then in the year immediately before an election the media-coined give away budget is constructed to win an election. And it seems to work for them.
Successive governments lack a true long term vision for investing in this country. They often pander to big business and rarely seem to be able to proactively plan ahead. For example, when was a metro first discussed?
Politicians making decisions based on the next election. Thats the incentive they have. We need to find some way to change those incentives. Eg taking some of the decisions out of their hands by forcing counter cyclical policies or Extra pay if projects come in on budget, lower pay if they don’t.
The Chinese budget decades ahead. Also when people were just getting used to the idea of cheap stuff from China 20+ years ago they were already hatching their plan to flatten the EU/USA car industry
The fiscal council are an extremely ideological, fiscally conservative bunch and are frequently wrong with their assertions. Not to say all, or even any, of these recommendations are wrong, but they absolutely should not be seen as some sort of authority and/or neutral arbiter on the subject and it showcases the utter laziness and general uselessness of Irish journalists that they are
It’s both the Government and the opposition. I remember (unlike most on this sub) the lead up to 2008. There were plenty of people and opposition parties (FG primarily and Labour to an extent) saying in 2002 that we were overheating the economy. They were heavily punished by the electorate for that in the 2002 GE. Which meant that by 2007 the entire Dail were spending the budget twice over. We have a nasty history in Ireland of punishing parties like the Greens for doing the right thing and rewarding parties for making extraordinary claims with other peoples money.
Out best Governments have always emerged out of crashes where the electorate could be ignored to do the right thing. An example of this is that overweened “housing crisis” where every intervention is not making it worse than just leaving it to the market and there is no physical way of solving it in the short term.
We’re at the same space today. 65% of all tax take comes from the MNC’s. You’d imagine from some folk on here who think we just need to tax them even more or that we don’t need them because houses not understanding that the crash involved would lead to a return to mass emigration.
* We are spending far too much money in this country buying votes due to an excess of parochial democracy and spending far too much money on unproductive activities.
* We are spending setting far too little money aside for the next downside.
* Our domestic economy is extremely uncompetitive and inefficient from Government to SME’s which is hidden by the MNC sector.
When the tide goes out it will be interesting to see how quickly people forget about the “housing crisis” of 2022-27 and start realising we had a unique opportunity with a Golden Goose that we wasted.
Voters don’t agree, so it’s not realistic to expect sensible long-term planning.
When you know there’s a massive global recession/depression just around the corner, why worry about consequences? Spend like there’s no tomorrow!!
Saving money is important but the opportunity cost of a gigantic rainy day fund and not investing in public services is already evident on the motorways every morning and the growing homeless list.
These reports should be considered in conjunction with other factors and publications. Most comments here seem unable to synthesise information, just regurgitate and complain from one news article to the next.
State spending in 2026 will be 4.7% higher than 2025, accounting for inflation. That’s bananas. You and I might not have got our customary tax indexing or recent one off measures, but the Irish budgeting stance is majorly expansionary.
The state spent €77bn in 2019 on the eve of the pandemic. It’s spending €132bn in 2026 (and probably more because cost overruns have occurred every year recently). That’s a compound annual growth rate of over 8%. For comparison, 2015-2019 it went from €70.4bn to €77bn, a CAGR of 2.27% per annum.
I don’t think people really appreciate the scale of the increases – if we had grown spending 2020-2026 at the same pace as 2015-2019 then govt spending would only be €90.2bn today, not €132.1bn. You can argue that we needed to increase spending, but that’s the size of the compounding annual high rate of growth coming in year on year on year.
Government spending has been a runaway train since Covid. And if there’s a downturn, we know how sticky all that spending can be – there’s 75,000 more working in the civil and public sector today than 2019, a growth of 23% over the period. Not many (temps, agency workers maybe) will lose their jobs in a downturn, and the pay and pension bill only gets bigger.
Government is also spending all this money at a time of high economic growth when the economy seems to be at capacity. Trying to load in more spending for worthy things, like more infrastructure, is very difficult to do effectively when you can’t source the labour or resources to do it. We ought to save more and deploy it when there is a downturn, and keep e.g., construction workers going rather than emigrating – as happened post 2008.
We’ll look back on IFAC reports like this if there is an economic shock and all be wise after the fact, while politically to be fair voting for and demanding parties that just ask for more, more, more (as we did in the general election of 2007).
14 comments
Headlin we on the Journal is the exact opposite ”
Government spending ‘like there’s no tomorrow’ despite ‘predictable budgetary pressures’
https://www.thejournal.ie/irish-fiscal-advisory-council-government-spending-6885038-Nov2025/
>IFAC says Government needs to move away from year-to-year budgeting.
>Moving to multi-annual budgeting would give government agencies more certainty over their future funding, it says. This would aid better planning and delivery of public services.
>The Irish Fiscal Advisory Council says the share of corporation tax which is being saved will drop from 32% this year to 15% in 2026.
>The watchdog warns that spending is set to grow by over 11% in 2025 which it described as “much faster” than was sustainable.
So common sense recommendations that will fall on deaf ears
Ireland has become increasingly populist economically.
The give away budgets need to be stopped and a sensible conversation on welfare and migration spending needs to be had.
We can’t fund the unproductive indefinitely, there needs to be a fair balance.
We don’t have a single political party who are demanding that we reduce spending and save more for a rainy day. In fact most of the opposition parties would say we have ‘austerity’, and need to spend much much more.
IFAC are giving sound economic advice for the long term. But the political system does not give a feck about the long term.
The trend in budgets is fairly easy to follow surely.
In the first year or two after an election the ordinary punter gets nothing and then in the year immediately before an election the media-coined give away budget is constructed to win an election. And it seems to work for them.
Successive governments lack a true long term vision for investing in this country. They often pander to big business and rarely seem to be able to proactively plan ahead. For example, when was a metro first discussed?
Politicians making decisions based on the next election. Thats the incentive they have. We need to find some way to change those incentives. Eg taking some of the decisions out of their hands by forcing counter cyclical policies or Extra pay if projects come in on budget, lower pay if they don’t.
The Chinese budget decades ahead. Also when people were just getting used to the idea of cheap stuff from China 20+ years ago they were already hatching their plan to flatten the EU/USA car industry
The fiscal council are an extremely ideological, fiscally conservative bunch and are frequently wrong with their assertions. Not to say all, or even any, of these recommendations are wrong, but they absolutely should not be seen as some sort of authority and/or neutral arbiter on the subject and it showcases the utter laziness and general uselessness of Irish journalists that they are
It’s both the Government and the opposition. I remember (unlike most on this sub) the lead up to 2008. There were plenty of people and opposition parties (FG primarily and Labour to an extent) saying in 2002 that we were overheating the economy. They were heavily punished by the electorate for that in the 2002 GE. Which meant that by 2007 the entire Dail were spending the budget twice over. We have a nasty history in Ireland of punishing parties like the Greens for doing the right thing and rewarding parties for making extraordinary claims with other peoples money.
Out best Governments have always emerged out of crashes where the electorate could be ignored to do the right thing. An example of this is that overweened “housing crisis” where every intervention is not making it worse than just leaving it to the market and there is no physical way of solving it in the short term.
We’re at the same space today. 65% of all tax take comes from the MNC’s. You’d imagine from some folk on here who think we just need to tax them even more or that we don’t need them because houses not understanding that the crash involved would lead to a return to mass emigration.
* We are spending far too much money in this country buying votes due to an excess of parochial democracy and spending far too much money on unproductive activities.
* We are spending setting far too little money aside for the next downside.
* Our domestic economy is extremely uncompetitive and inefficient from Government to SME’s which is hidden by the MNC sector.
When the tide goes out it will be interesting to see how quickly people forget about the “housing crisis” of 2022-27 and start realising we had a unique opportunity with a Golden Goose that we wasted.
Voters don’t agree, so it’s not realistic to expect sensible long-term planning.
When you know there’s a massive global recession/depression just around the corner, why worry about consequences? Spend like there’s no tomorrow!!
Saving money is important but the opportunity cost of a gigantic rainy day fund and not investing in public services is already evident on the motorways every morning and the growing homeless list.
These reports should be considered in conjunction with other factors and publications. Most comments here seem unable to synthesise information, just regurgitate and complain from one news article to the next.
State spending in 2026 will be 4.7% higher than 2025, accounting for inflation. That’s bananas. You and I might not have got our customary tax indexing or recent one off measures, but the Irish budgeting stance is majorly expansionary.
The state spent €77bn in 2019 on the eve of the pandemic. It’s spending €132bn in 2026 (and probably more because cost overruns have occurred every year recently). That’s a compound annual growth rate of over 8%. For comparison, 2015-2019 it went from €70.4bn to €77bn, a CAGR of 2.27% per annum.
I don’t think people really appreciate the scale of the increases – if we had grown spending 2020-2026 at the same pace as 2015-2019 then govt spending would only be €90.2bn today, not €132.1bn. You can argue that we needed to increase spending, but that’s the size of the compounding annual high rate of growth coming in year on year on year.
Government spending has been a runaway train since Covid. And if there’s a downturn, we know how sticky all that spending can be – there’s 75,000 more working in the civil and public sector today than 2019, a growth of 23% over the period. Not many (temps, agency workers maybe) will lose their jobs in a downturn, and the pay and pension bill only gets bigger.
Government is also spending all this money at a time of high economic growth when the economy seems to be at capacity. Trying to load in more spending for worthy things, like more infrastructure, is very difficult to do effectively when you can’t source the labour or resources to do it. We ought to save more and deploy it when there is a downturn, and keep e.g., construction workers going rather than emigrating – as happened post 2008.
We’ll look back on IFAC reports like this if there is an economic shock and all be wise after the fact, while politically to be fair voting for and demanding parties that just ask for more, more, more (as we did in the general election of 2007).
[https://www.whereyourmoneygoes.gov.ie/en/2026/](https://www.whereyourmoneygoes.gov.ie/en/2026/)
[https://databank.per.gov.ie/Public_Service_Numbers.aspx?rep=SectorTrend](https://databank.per.gov.ie/Public_Service_Numbers.aspx?rep=SectorTrend)
“And I’d do it again, and there’d be no fucking shtoppping me”
– The Government
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