Breaches of spending rule will add to up to €8.5bn by next year, Ifac warns

Acting chairman of Irish Fiscal Advisory Council tells Oireachtas committee net spending is set to exceed the 5% limit this year and next

`We estimated that an overrun of €1.6 billion looked likely for 2024. The latest fiscal monitor data means our estimated overrun for 2024 is now €90 million higher,' said Prof Michael McMahon. Photograph: Niall Carson/PA Wire

But the Government is set to breach the rule numerous times, with net spending set to increase more than 5 per cent this year and next year, Prof Michael McMahon, acting chairman of the Irish Fiscal Advisory Council, told the Committee on Budgetary Oversight on Wednesday. Overruns in spending are occurring earlier this year than in past years, and at a higher level, he said.

This includes spending on health related to the pandemic, spending on humanitarian assistance for refugees and a new category of capital spending labelled windfall capital investment.“The council is not opposed to these items of spending. In fact, we welcome that these items of spending are included in projections out to 2027,” he said.

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