Tánaiste rejects Ifac criticism as Government urged to ‘get the balance right’ in Budget

Simon Harris defended the Government’s spending approach after Ifac warned a large Budget package could fuel inflation further

Minister of State Robert Troy (left) and Tánaiste Simon Harris speaking to the media in Dublin. Picture: Cate McCurry/PA Wire

The Tánaiste has rejected strong criticism from the State’s spending watchdog, insisting the Government has to “get the balance right” in the upcoming budget.

The Irish Fiscal Advisory Council (Ifac) has warned that a large budget package will only drive up prices and said the plan to increase spending by 6% is not appropriate given the current state of the economy.

In its pre-budget statement, Ifac also criticised the fact that Government spending overruns have now become routine.

However, Finance Minister Simon Harris insisted that the Coalition is being “very transparent” with its spending plans, adding: “It’s Government’s job to try and exercise the right judgment to get the balance right.” Mr Harris rejected assertions that the Coalition routinely ignores Ifac’s advice, saying the council is not the executive Government of the country.

“We each have respective roles. Democracy matters in this country as well,” he said.

Opposition parties criticise Government spending 

Social Democrats finance spokesperson Cian O’Callaghan said the approach taken by the Government over many years “makes a mockery of the budgetary process”.

He said departments often go into Budget negotiations knowing that supplementary funding will be found later in the year, which means longer-term measures are not being rolled out.

“If budgets are being set and allocated and there is a clear understanding that there is going to be extra money later on, it has a spiralling effect,” he said.

Labour TD Ged Nash accused the Government of adopting a “casual dismissal” of Ifac’s analysis and recommendations, which he said is “troubling”.

“There is a pattern with this government and it’s becoming ever more dangerous. You can’t narrow the tax base with the likes of the VAT cuts for the hospitality sector and at the same time spend like there’s no tomorrow. Last year we wanted to see PAYE workers given a break and Fine Gael and Fianna Fáil took another view.” 

He added: “You can be social ambitious and fiscally responsible at the same time, and this government has shown that it is neither.” 

Tánaiste warns against ‘chasing inflation’ 

Mr Harris said he is aware of the risks of “chasing inflation”, saying any measures brought forward by the Government would be balanced and focused on priority areas.

He cited improvements in childcare and investing in existing sovereign wealth funds as such measures.