As the Minister in charge of public spending, Jack Chambers is duty bound to play bad cop with his ministerial colleagues and their spending plans. More so now than ever. Government spending in Ireland is a runaway train.
Last year it came in €4 billion beyond what the Government sanctioned in the previous budget. Between 2019 and 2024, it increased by 54 per cent to €104 billion, equating to an average annual increase of 9.4 per cent, which the Irish Fiscal Advisory Council describes as “reckless”.
Despite a commitment in the Government’s Medium Term Fiscal and Structural Plan to limit the annual increase to 6 per cent, spending for the first four months of 2026 is already up 9 per cent.
But when Chambers attempts to baton charge his fellow Ministers with these worrying facts, he is undermined by the fountain of corporate tax receipts that continue to flow.
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Receipts from the business tax hit a record €33 billion last year and are expected to go higher again this year.
As Goodbody Stockbrokers said in a research note on Monday: “The difficulty for the Minister is that at a headline level, Ireland’s public finances are in very good health, with Ireland likely to be one of only three countries in the euro area to be in surplus this year.
“This is clearly helped yet again by the very high level of corporate tax receipts which flatter the picture.”
The brokerage, however, noted that spending was already higher than expected this year due to a €250 million overspend in health in the first quarter and with a €600 million education overspend (for the year) brewing.
It also warned that Ireland will face higher spending risks related to the hosting of the EU presidency and the next public sector pay deal, which commences in an environment of rising inflation.
[ David McWilliams: Is Ireland the worst run country in Europe?Opens in new window ]
“The energy price spike and the seeming absence of a deal to end the Iran conflict may bring about more calls for fiscal measures in the second half of the year,” it said.
Ultimately, Chambers must face down these pressures while sitting on a veritable gold mine, a difficult political task.
