Budget spend smallest since end of austerity

Plans by Finance Minister Paschal Donohoe to spend €500m in his first budget in October will be the smallest amount spent since the end of austerity at a time when spending demands from business and political groups has increased.

The room in ‘fiscal space’ — the net amount available for tax cuts and spending increases — detailed in his Summer Economic Statement may be even smaller, at €300m, because the plans do not account for the increased spending for public pay rises under the renegotiation of the Lansdowne Road accords.

The budget, which may be the last before a general election next year, will be substantially smaller than the previous two budgets announced by predecessor Michael Noonan. Those measures added to the spending base and under EU spending rules, curtailed Mr Donohoe’s scope for tax cuts and spending increases.