The Irish Times view on the key talks on Budget 2024: persist with prudence

Politically difficult though it may be, Michael McGrath and Pachal Donohoe should insist that spending does not exceed the agreed limits and “once-off” supports are less than last year’s

Next week is the crucial week in preparing the Budget, when most of the big decisions are likely to be made behind closed doors at Government Buildings and in the departments of Finance and Public Expenditure. For the Coalition, the political stakes are high – a year, or 18 months at most, away from an election, under pressure in the polls, and with a clear public demand for spending increases, giveaways and tax cuts. Budget ministers Michael McGrath and Paschal Donohoe are fortunate in that they have enormous resources at their disposal. But they cannot possibly satisfy all the demands of their Government colleagues, the Opposition, the cacophony of interest groups – and the wider public. Nor should they try.

The findings of this week’s Irish Times/Ipsos poll demonstrates the extent of the tide in favour of spending the resources they have, and the limited extent of the constituency for fiscal prudence. Offered various budget options, just eight per cent of voters opted for saving surplus resources to invest in the future – far behind immediate help with the cost of living (52 per cent), reducing tax (18 per cent) and increasing spending on public services (19 per cent). The insipid support for the Government parties in the poll, and the spectacle of Sinn Féin roaring ahead, will further heighten internal pressure for big spending increases. It would be the wrong thing to do.

Politically difficult though it may be, McGrath and Donohoe should insist that spending does not exceed the limits already set and the “once-off” cost of living supports are less than last year’s €4 billion. That would still be a very substantial increase in permanent spending and a hefty package of giveaways. But it would also enable the two men to put away windfall corporation tax revenues for future use.

Sticking to prudence is a political as well as an economic counsel: if voters want spendthrift options, there are plenty of them around. The only way forward for the Government is to win the argument for a sensible fiscal policy, and then implement it.