First shots fired in the Government’s budget battles

Taoiseach Simon Harris and Tanaiste Micheal Martin both promised a range of new spending measures in their ardfheis speeches. Photograph: Niall Carson/PA Wire

Despite what you might be inclined to think listening to 90 per cent of political debates, however, the Government – while certainly in an extraordinarily fortuitous fiscal position – does not have unlimited financial resources., the shortly-to-be-legal obligation on the Government to put €6 billion into its long-term savings funds means the budgetary arithmetic is a lot tighter than it looks.

Ministers will continue to press for more spending in their departments. The McGrath-Donohoe axis of prudence will continue to resist what they see as excessive demands. So where will we end up in October? “Absolutely,” says University of Limerick Professor of Economics Stephen Kinsella. “They’ve got something like €26 billion to €30 billion in cash. They’re incredibly liquid at the moment.”This is the fear that haunts the Departments of Public Expenditure and Finance: that they will repeat the mistakes of the past and build up big spending commitments that the country will not be able to afford in the event of a downturn.

Fianna-Fail Budget Michael-Mcgrath Paschal-Donohoe Department-Of-Finance Department-Of-Social-Protection Dermot-O-Leary Goodbody

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