Spend and be damned? Minister for Finance walks a budget spending tightrope

Budget planning sees the return of the economic debate of when is a spending limit a spending limit as the Fiscal Council issues another warning to ministers McGrath and Donohoe, writes Ronan Smyth

Minister for Finance Michael McGrath (right) and Fine Gael Minister for Public Expenditure Paschal Donohoe (left) have decided to go beyond their own spending rule again and increase spending, modestly, by 6.1% in the budget. File photo: Sasko Lazarov/RollingNews.ie

The preparations for the forthcoming budget in October has both the finance minister and public expenditure minister walking a tightrope, carefully trying to navigate spending some of their excess corporation tax, currently burning a hole in their pockets, but not adding to inflationary pressures either.

In the lead-up to the Summer Economic Statement (SES), released on Tuesday, there have been numerous fiscal advisory organisations who preached a prudent approach to spending, telling the ministers that they need to stay within their own rules and not increase expenditure by more than 5%.