The Irish Fiscal Advisory Council, the country’s budget watchdog, has raised concerns about the government’s current spending approach. They warn that the “everything now” strategy could lead to problems down the road.
The Council says the government is trying to do too much at once: cutting taxes, increasing daily spending, and ramping up long-term investment plans. This approach, they argue, is putting unnecessary pressure on the economy.
While Ireland’s job market is strong, with record employment and rising wages, the Council points out that prices for things like rent, food, and healthcare are still going up quickly. They believe the government’s actions are making this situation worse.
The watchdog is particularly concerned about the government’s claims of having a budget surplus. They say this surplus is misleading because it relies heavily on taxes from a small number of foreign companies. Without this corporate tax money, Ireland would actually be facing a large and growing deficit.
According to The Journal, The Council warns that if these corporate tax revenues suddenly drop or if the job market takes a hit, the government might have to go back on its promises. This could happen at a time when the economy needs the most support, potentially repeating past mistakes.
To address infrastructure needs, the Council suggests the government look beyond just throwing money at the problem. They recommend focusing on projects that require fewer workers and finding ways to encourage private sector involvement.
Seamus Coffey, the Council’s Chair, summed it up by saying the government’s big promises are making it harder for people to afford basic necessities. He urges the government to stick to its own spending rules now, rather than having to make painful cuts later, possibly during the next recession.