The Irish Times view on the Ifac report on the budget: some timely warnings

• Published date: 06 September 2023
• Publication title: Irish Times: Web Edition Articles (Dublin, Ireland)

Despite the warnings, the Government is unlikely to change its plans for a €6.4 billion budget package of permanent measures. This was outlined in the Summer Economic Statement, involving a €1.1 billion tax package, with the rest going on spending increases

IFAC objects to the plans to breach a previous rule limiting permanent spending increases to 5 per cent. Given the strong expected budget surplus , the planned increases do not appear excessive for 2024. But the watchdog is correct to send a warning shot in relation to future years. And its concerns about higher spending fuelling inflation need to be taken into account when framing the once-off budget-day measures which are likely to form a substantial part of the package.

IFAC points out that with energy prices falling and inflation on the wane, there is a much weaker case for once-off supports for 2024. Politically, some are still likely to be announced and there are less well-off households needing support. But calls for a string of new energy credits for all households risk giving money to people who do not need it.

IFAC's warnings of repeating the mistakes of the past have been framed by the latest exchequer returns, showing a sharp drop in corporate tax receipts in August. Caution is needed in interpreting one month's figures and overall corporation tax this...