Thought The Budget Felt Shortsighted Due To A Looming Election? So Did Watchdog
Photograph: Niall Carson
Thought The Budget Felt Shortsighted Due To A Looming Election? So Did Watchdog
Text: Izzy Copestake
Who’s surprised?
The 2025 Budget has been criticised for being short-sighted, and it appears that Ireland’s Fiscal Watchdog agrees. After being promised real change and more support for the winter, the country received a handful of unfocused “one-off” payments. Interestingly, many of these payments have been made for the last three years.
€9.1 billion was spent in this year’s budget, a dramatic increase from the pre-Covid 2020 budget of €3.6 billion. Without a clear long-term strategy, the government has been accused of using the budget as a pre-election spending spree.
The Irish Fiscal Advisory Council (IFAC), which provides independent oversight of the government’s budget, published its first assessment of the 2025 Budget, and the review is far from complimentary.
The watchdog accused the government of overspending and called for more serious fiscal planning. “Ireland needs a more serious vision that delivers on the economy’s needs without repeating the boom-to-bust pattern of its past,” the report stated. It also warned that overspending without addressing long-term issues would do little to alleviate the cost of living crisis.
“Large budget packages in recent years have put money back in people’s pockets, but they have taken it away by pushing up prices. By breaching its spending rule, the Government is estimated to add €1,000 to the cost of a typical household’s yearly outgoings. This is probably an underestimate.”
The Fiscal Watchdog has also criticised the the lack of targeted support packages, pointing out that only around half of the government’s cost of living measures were targeted. Measures such as rent reliefs, energy credits, and student fee reductions, while welcomed by many in need, were given universally. This means that even the country’s wealthiest citizens received the same help as those struggling. “The same supports could have been provided to those most in need at a much lower cost.”
The reason behind this broad, universal spending? Politics. Speaking on RTÉ’s Morning Ireland, the chair of the Irish Fiscal Advisory Council, Seamus Coffey, stated: “You have to take into consideration that these decisions are made in a political environment. Maybe some of that lack of a medium and long-term view can be explained by the fact that we are so close to a General Election.”
“The Government should be responding to the increased inflation we’ve seen recently, but it should do so on a more permanent basis, particularly for low-income households.”
Elsewhere on District: What Did The Budget Actually Do For Young People?
