New game by fiscal watchdog to highlight next government's 'abundance of resources'

Pictured Chairperson of Ifac Seamus Coffey. Photo: Sam boal/Rollingnews.ie

A new game developed by the Irish Fiscal Advisory Council (Ifac) will allow players to experience life as the Minister for Finance for the next five years.

"Finance Minister - the Game" aims to highlight the cash available to the next government, which the fiscal watchdog says is set to be "flush with resources." While Ifac does not play a role in costing manifestos or specific measures, it said it can assess the likely resources and pressures faced in the coming years. 

“We have a lot to look forward to in the coming years. But given Ireland’s ageing population, and large existing commitments, we shouldn’t get too carried away," said Ifac chairperson, Seamus Coffey. 

"If we want to make sure that the new things we do in terms of taxes and spending can be done on a continuing basis, they need to be financed sustainably. Otherwise, we will store up problems for when we enter the next recession — exactly the time that you don’t want to be cutting back.”

The watchdog said the next Government will benefit from a falling public debt, high employment and strong corporation tax receipts. Sticking to what it considers sustainable, Ifac said there could be 

as much as an additional €7.5bn every year to play with. This is in terms of new spending increases and tax cuts, while keeping the economy and public finances safe.

However, as the new game shows, Ifac said some rises in costs will be hard to avoid, with Ireland’s ageing population set to eat up nearly €1.5bn as more people draw pensions and avail of health and long-term care services. 

Capital projects already plan to take up close to another €1.5bn, the watchdog added, with the rising costs of buying goods and services used by the public sector adding another €1bn.

This means there could be as little as €500m in spending left over each year if welfare payments and public sector pay is to keep up with general wages rises, Ifac noted, warning players to balance any increases in spending with increases in revenue. 

"Finding savings in some of the €130bn already being spent could generate more resources," the watchdog said. 

"Failing that, the next finance minister might be tempted to dip further into risky corporation tax receipts to plug the funding gap."