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The Irish Fiscal Advisory Council (Ifac) has warned that the government's planned 6% spending increase exceeds the sustainable growth rate of the economy. The watchdog noted that spending overruns have been a recurring issue, averaging over €2 billion per year over the past decade, with the last time spending was under budget occurring in 2013.
The Irish Fiscal Advisory Council costs about €1m to run, a drop in the ocean of State expenditure. Photograph: Chris Maddalonimust feel it is a lonely voice over recent years.
” So said Goodbody economist Dermot O’Leary this week in his assessment of the pre-budget statement published on Tuesday by the Republic’s statutory budget watchdog.
“Spending overruns have become routine and have repeatedly pushed spending above budget-day plans. Over the past decade, spending overruns have averaged more than €2 billion per year in today’s terms,” said the Ifac, noting that the last time spending came in at, or below, budgeted levels was in 2013 – a time when the financial crash that had meant the Republic relied on international bailouts was fresh in the mind.
The economy continues to perform well and does not need support from budgetary policy, it said, far from the first time. Data centre boom turns many niche specialist businesses into multimillion-euro industry players Clare Walsh and Paul Vallely: ‘We have a brand that’s on trend, affordable and fun in a category most people find boring’ The Government’s stated plan to increase spending by 6 per cent next year was more than the sustainable growth rate of the economy and “not appropriate”, the report said, adding that a large budget package will add to inflation and increase costs for households and businesses – precisely what Government says it wants to avoid.
Responding to the Ifac report, Minister for Finance Simon Harris said the Government did not “ignore their advice” while, in the next breath, going on to acknowledge that they do exactly that and will continue to do so. The Ifac has been at this unrewarding task now since 2011. At some point, it seems sensible to ask, should they not just shut up shop and return to their, no doubt more rewarding, day jobs?
This is not to criticise the watchdog which has generally been a beacon of sense in a political sea of fiscal indiscipline. And it’s not so much a matter of saving cash – the council costs only about €1 million to run, which is a drop in the ocean of State expenditure. But it must be galling to be so routinely ignored and humiliated.
In its annual reports, the watchdog has a page on which it outlines Government actions in response to its previous assessments. Year after year, the findings are that little or no progress has been made. The only outright “wins”? A call on Government to “stop using fiscal gimmickry to make budgetary figures look better than they actually are” was respected and, after years of asking, medium-term forecasting is finally looking five years ahead.
Not much to celebrate, really. Perhaps it is just time to admit defeat, or even throw a spotlight on Government indifference by walking away. Patients can now dispose of unused and out-of-date medicines in any pharmacyGalway Races Ladies’ Day: ‘Colour and style just adds to everything that’s happening on the track’LATEST STORIES
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