\u201cWe\u2019re moving towards medium-term budgeting,\u201d Mr Harris said.<\/p>\n
The strategy envisages spending, capital and current, increasing from \u20ac110 billion this year to \u20ac147.3 billion by 2030. <\/p>\n
The annual increase in spending will taper from 7.2 per cent next year to 5.4 per cent in 2029 and 5.2 per cent in 2030, equating to average annual increase over the period of 6 per cent.<\/p>\n
This would represent a significant reduction on increases seen in recent years. <\/p>\n
[\u00a0Harris stakes reputation on new spending stricturesOpens in new window<\/a>\u00a0]<\/p>\n Between 2019 and 2024, spending increased by 54 per cent to \u20ac104 billion, equating to an average annual increase of 9.4 per cent, which the Irish Fiscal Advisory Council<\/a> (Ifac) has described as \u201creckless\u201d.<\/p>\n Spending for 2025 is already \u20ac4 billion beyond what was outlined in the budget last year.<\/p>\n The Medium Term Fiscal and Structural Plan is a requirement under the new European Union (EU) fiscal rules and the document will be submitted to the European Commission <\/a>in the new year.<\/p>\n Minister for Public Expenditure Jack Chambers<\/a> noted that the plan contained a \u20ac1 billion contingency which is not allocated.<\/p>\n If it is called upon, it will be deducted from spending the following year, Mr Chambers said.<\/p>\n [\u00a0Plan to spend 85% of corporation tax is \u2018risky\u2019 and a \u2018shift in policy\u2019, warns watchdogOpens in new window<\/a>\u00a0]<\/p>\n The Department for Finance\u2019s chief economist John McCarthy acknowledged that total Government spending, voted and non-voted, the metric that the European Commission monitors, would rise at a slightly higher average annual rate of 6.5 per cent during the period covered by the plan.<\/p>\n He also admitted that the penalty for breaching the new spending limit would be \u201creputational rather than legal\u201d.<\/p>\n Attempts by the previous Government to adopt a 5 per cent annual spending cap were abandoned while much of the additional spending introduced during the high-spending Covid years has now been built into the Government\u2019s expenditure base. <\/p>\n This has prompted criticism from Ifac and the Central Bank <\/a>which have both warned about the Government\u2019s increasing reliance on windfall corporation tax receipts<\/p>\n Minister Harris said the plan would prioritise the objectives of the National Development Plan to support investment in critical infrastructure such as electricity, water, transport and housing.<\/p>\n![\"\"](\"https:\/\/www.europesays.com\/ie\/wp-content\/uploads\/2025\/08\/1754647931518-c07d65db-55b5-463e-ae51-976300c5837e.jpeg\"\/)
Could the decision to spend most of next year\u2019s corporation tax come back to bite the Government?<\/p>\n