Donohoe reiterates need to manage spending despite tax surge

The Government reiterated the need to be mindful of how it spends the surge in corporation tax receipts, as Minister for Public Expenditure Paschal Donohoe warned the exchequer would have recorded a “significant” deficit last year without them.

Mr Donohoe, along with Minister for Finance Michael McGrath, will consider the Government’s budgetary and economic position in advance of the summer economic statement, he told the Oireachtas budgetary oversight committee on Wednesday.

The Government is under pressure to increase spending, amid a record surplus driven by rocketing tax from companies. Still, the Department of Finance is trying to balance any increase in spending with the possibility of turbocharging inflation which has started to come down in recent months.

“The careful management of our public finances, while responding to significant external challenges, has supported our economy to remain resilient,” Mr Donohoe told the committee, according to a copy of his opening statement.

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“We must now plan for the future, investing in digitalisation and decarbonisation through the National Development Plan, and in the future quality of life of our people through our public services.

“Over the coming months I, with my colleague, the Minister for Finance, will consider how we can best use Budget 2024 to achieve this,” Mr Donohoe said.