Govt breaking its promise on spending increases
The Irish government is expected to breach its 2026 spending ceiling by €1.5 billion, driven largely by overruns in the Department of Health. Despite previous promises to curb excessive spending, reliance on volatile corporation tax revenue continues to fund these increases.
Why it matters
It highlights fiscal policy challenges and the sustainability of public spending in the context of Ireland's economic reliance on multinational tax contributions.
Last year, Minister for Finance Simon Harris and Minister for Public Expenditure Jack Chambers promised the days of continuous spending overruns were at an end.
Their message was that the party was over for departments and ministers who had overseen enormous surges in spending over recent years.
Minister Harris said expenditure allocations were being increased and "departments now need to live within those budgets". Minister Chambers said that continuous spending overruns, by departments that could not operate within their means, had to come to an end.
The two ministers published a Medium Term Fiscal and Structural Plan, which set out expenditure ceilings for each year.
Ireland was required to submit the document to the EU.
In 2026, spending was supposed to be limited to an increase of 7%.
That was an enormous rise, bigger than any expenditure increase in any other EU country.
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