Fiscal Council warns government about Budget spending

The Government has been warned not to spend too much money in next month's budget.

The Fiscal Advisory Council has said improvements in the economy should not lead to politicians splashing out.

There is around €500,000,000 up for grabs in Budget 2018.

In its pre-Budget submission this morning, advisors have said any expenditure above that point should come from tax increases to leave us with enough funds in case of a hard Brexit.

The council did say that Ireland made substantial progress in moving public finances to a safer position but risks still remain.

“The council assesses that it would be conducive to prudent economic and budgetary management for Budget 2018 to stick to existing spending and tax plans within the available gross fiscal space for 2018 of around €1.7 billion,” it said.

The council also said the cost of previously announced measures and the yet to be announced pay agreement for the public sector, reduces the scope for new initiatives for next year's Budget.

The council also mentioned the Rainy Day Fund, which it said could “make a useful contribution to more sustainable growth and to prudent management of the public finances”. However it said details of how it should operate should be published as it is not clear how the design of the fun will “ensure that it is truly countercyclical”.