Supercharged expenditure, plus huge spending package

There was not one Budget announcement yesterday, in fact, there were two.

Not only was there a massive package of spending for 2025, the Government also supercharged expenditure for the remaining three months of this year.

It added €3.7bn to spending for 2024. That is a huge change.

It is a combination of cost over-runs, particularly in the Department of Health, and additional measures for 2024.

Among them are a plethora of double payments and credits which will be made available before Christmas.

But the Irish Fiscal Advisory Council, the body set up to help prevent another financial crisis, said only half of the supports of €2.1bn announced by the Government were targeted.

It added: "The same supports could have been provided to those most in need at a much lower cost."

Expenditure will increase by 9.2% this year.

That is far more than the Government's abandoned rule of limiting spending increases to 5%.

It all smacks of a pre-election Budget, according to the Government’s critics.

The Coalition’s response is that it is a question of helping people make ends meet.

The Government is pouring more money into the economy when there is full employment, despite a significant increase in the population.

The issue with the additional spending is that it runs the risk of increasing prices at a time when Ireland has just recovered from a cost-of-living crisis.

The fiscal council said the Budget "repeats the mistakes of the past".

It added: "Ireland needs a more serious vision that delivers on the economy's needs without repeating the boom-to-bust pattern."

Read more: Latest Budget 2025 stories

Then there is the question of whether the Government is spending money wisely.

The €3bn from the sale of AIB shares by the State is being used to invest in Irish Water or Uisce Éireann, the Land Development Agency and the electricity network.

Capital investment in these areas has lagged.

But there is the bigger issue of the €14bn of money from Apple and what to do with it.

Minister for Public Expenditure Paschal Donohoe set out some priorities including transport, water, electricity and housing but the specifics are still to come.

The investment in infrastructure has been welcomed.

Budget 2025 does include a series of measures to take account of inflation by cutting Universal Social Charge, raising the point at which the higher rate is paid while increasing tax credits.

For example, an individual on a salary of €50,000 will be €900 better off which is a 2% increase - it is just ahead of recent rates of inflation.

But make no mistake, the Government is spending heavily.

It can only do so because of strong corporation taxes paid by multinationals and a healthy economy. If either of those were to change it would be a very different story.