Ibec: Donohoe has ample fiscal space

Finance Minister Paschal Donohoe has more than enough money to build schools and roads as well as to cut personal taxes but only if he throws off artificial fiscal constraints he is applying in his October budget, according to Ibec.

The business group says if the current EU fiscal rules are correctly applied Mr Donohoe will have €400 million in additional resources for his budget, and potentially €7bn more over the next four years. The budget submission comes amid growing concerns from a number of business groups that the Government will disappoint expectations by failing to fund a whole range of capital projects.

In recent weeks, Mr Donohoe has said he has around €300m in so-called fiscal space as he prepares for his first budget. Many economists believe the size of the package will increase significantly by budget day but will fall well short of the spending increases and tax cuts delivered in recent years. Ibec contends the finance minister is boxing himself in for no good reason.