Fiscal watchdog warns of ‘larger than appropriate’ Budget package

By Cillian Sherlock, Press Association

The planned Budget package is “larger than appropriate”, the State’s fiscal watchdog has warned, especially with an expectation that spending will be even higher than what is announced.

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.

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 follow three years of rapid spending growth.

The Summer Economic Statement outlined that voted spending would increase by €7 billion (a 5.9 per cent increase) in the Budget, with a tax package of €1.5 billion of new measures.

The council says that this amounts to a net spending increase of six per cent – above the sustainable growth rate of 2.5 per cent-three per cent and an additional two per cent for long-run inflation (4.5 per cent-give per cent 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.