Little fiscal room for Paschal Donohoe’s first budget

New finance minister Paschal Donohoe will have a limited amount of fiscal muscle to flex in his first budget in October to help bolster the Coalition, as exchequer figures showed tax revenues were still running below target at the half-year stage.

Unlike two years ago when the Government splurged around €3bn in spending increases and tax cuts before the election, the budget finances this year are reined in by EU spending rules.

The latest figures showed the exchequer had collected tax revenues of over €23.4bn in the first six months, up 4% from the same period last year. Tax revenues are more robust at end Q2, providing a level of confidence the Budget 2017 target will be achieved, according to the Department of Finance.