Big decisions on tax and expenditure

The budget will be a test of Finance Minister Pascal Donohoe, who now has complete control as a result of the two portfolios of finance and public expenditure being brought under his remit.

A significant portion of the so-called fiscal space has already been conceded by the agreement on public sector pay, leaving less room for other priorities. The water crisis in Drogheda highlights the fact that even if water charges are gone we have to pay if we want water. If we want to build a better country, money has to be found, and spent prudently.

Two key areas of philosophical disagreement dominate the pre-budget debate. The first is whether higher taxation actually leads to higher tax receipts?