Budget package expected to almost double to €1bn

Fiscal space for spending and tax cuts understood to grow after talks with Europe

Minister for Finance Paschal Donohoe will next week deliver the Government’s summer economic statement, likely to contain an update on the fiscal space for next year.  Photograph: Gareth Chaney Collins

Minister for Finance Paschal Donohoe will next week deliver the Government’s summer economic statement, likely to contain an update on the fiscal space for next year. Photograph: Gareth Chaney Collins

The amount of money available for tax cuts and spending increases in the October budget is likely to rise significantly from €550 million to as much as €1 billion.

Changes in the way the fiscal space – the amount of extra spending and tax cuts permitted under European rules – is calculated are likely to give the Government extra leeway as it prepares the budget, according to people with knowledge of the process.

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