Tánaiste says Government does not ‘ignore’ advice of State’s spending watchdog

By Cillian Sherlock and Cate McCurry, Press Association

Tánaiste Simon Harris said the Government does not “ignore” the advice from the State’s fiscal watchdog, after it said that the planned Budget package is “larger than appropriate”.

The Fiscal Advisory Council believes that Ireland’s current strong economy does not need budgetary support – and that a large package could fuel further inflation.

However, the Minister for Finance also said that issues emerge during the year which Government needs to respond to.

Harris defended the Government’s spending plan, saying that planned measures will have a “positive effect” on inflation.

In a pre-Budget statement, the council said the economy is performing well and that net spending should remain in line with a sustainable growth rate.

However, it said current plans would increase net spending slightly faster – and follows three years of rapid spending growth.

Speaking in Dublin on Tuesday, Mr Harris said: “Any measures that Government brings forward have to be balanced, have to be identified priority areas where we believe support is needed.

“We believe that making work pay is a good economic argument, is good for our economy, good for hard working people and families, childcare is a very targeted and important area.

“There are other things that Government can do like putting money into funds, putting money into capital, like setting up savings and investments accounts that I believe has a positive effect on inflation.

“It’s Government’s job to try and exercise the right judgment to get the balance right.”

He added that the Fiscal Council is right to state that any in-year drift in spending has consequences on resources.

Harris added: “Issues can also emerge in years that need to be responded and addressed in the interest our people and our economy.

“I welcome the existence of the Fiscal Advisory Council.

“There’s constantly demands for more spending, often legitimate issues that people can highlight and to have a Fiscal Advisory that can say hang on a second, here’s another perspective, is a welcome maybe anecdotes and perhaps remedy to some of that debate.

“We don’t ignore their advice but they are not the government.”

The Summer Economic Statement outlined that voted spending would increase by seven billion euro (a 5.9% increase) in the Budget, with a tax package of 1.5 billion euro of new measures.

The council says that this amounts to a net spending increase of 6%, above the sustainable growth rate of 2.5%-3% and an additional 2% for long-run inflation (4.5%-5% combined).

It also believes that a pattern of spending overruns since 2013 means that the actual package will end up being even larger.

It said showing restraint would benefit citizens by moderating inflation and the costs faced by households and businesses.

Meanwhile, the council again highlighted how much of Ireland’s public finances rely on three very large companies and the associated risks.

It said Eli Lilly paid around €5.8 billion in Irish corporation tax (18% of overall corporation tax collected), Microsoft paid about €5.1 billion between July 2024 and June 2025, and around €5.6 billion in the following 12 months (17 per cent of receipts across those two years).

Apple paid around €14.6 billion in Irish corporation tax between October 2024 and September 2025, mainly reflecting payments related to the Apple state aid case, as well as its corporation tax payments for the year.

Together, the council said these three companies likely paid almost half of Ireland’s corporation tax in 2025, even excluding the state aid case.