Irish Government's Spending Overruns: A Result of Poor Planning and Budgeting, Says Fiscal Council.

The Irish Fiscal Advisory Council has criticized the government's ongoing spending overruns, labeling them "poor planning and budgeting." The council notes that planned expenditure for this year is now expected to reach €108.7 billion, €3.3 billion more than initially set out in Budget 2025. IFAC also warns that spending overruns in 2026 are almost inevitable, with a forecast budget deficit of almost €11 billion next year.

The Irish Fiscal Advisory Council (IFAC) has criticized the government's ongoing spending overruns, labeling them "poor planning and budgeting." The council notes that planned expenditure for this year is now expected to reach €108.7 billion, €3.3 billion more than initially set out in Budget 2025 [1].

IFAC's chairman, Seamus Coffey, confirmed that current spending is likely to be around €1 billion higher than the figures outlined in the Summer Economic Statement. The council also warned that spending overruns in 2026 are "almost inevitable," with a forecast budget deficit of almost €11 billion next year. This equates to 3.2% of gross national income-star (GNI*), a measure of the domestic economy [1].

The government has allocated €90.5 billion for current expenditure and €14.9 billion for capital expenditure, both of which have since increased. The council noted that the Government's revised National Development Plan includes €2 billion of the increase for capital expenditure [1].

In a separate development, the Irish government has revealed how it plans to spend the €14.25 billion received from Apple, following a protracted legal battle over corporate tax arrangements. The funds will be directed toward long-overdue infrastructure investments, focusing on essential services like electricity, water, housing, and transport [2].

Prime Minister Micheál Martin called the €14.25 billion the largest infrastructure investment in the country's history. The funds will help plug gaps in Ireland's infrastructure, which has struggled to keep pace with its economic recovery [2].

The Apple tax windfall will be used primarily for basic infrastructure, including wastewater treatment and expansion of the electricity grid. Additional investment is earmarked for housing and transport networks, with a portion of the funds supporting the Shared Island initiative [2].

The funds come from the conclusion of a nine-year dispute between the European Commission and Ireland over what it deemed illegal state aid. Ireland had offered Apple substantially reduced corporate tax rates to establish its European headquarters in the country. The Commission ruled these arrangements broke EU law, even though Apple complied with the tax rules in place at the time [2].

While the Irish government initially sided with Apple in appealing the ruling, it was eventually required to collect the underpaid taxes. Apple paid the full amount into an escrow account while legal proceedings played out [2].

The October budget will provide more detail on specific projects under the National Development Plan and the Shared Island fund. The government is positioning this tax windfall as a chance to modernize infrastructure and relieve pressure on the country's strained housing and utility systems [2].

Some economists have raised concerns about whether Ireland's construction sector has the capacity to deliver on these promises quickly. Planning delays and labor shortages could slow down the rollout [2].

References:
[1] https://www.irishtimes.com/business/2025/07/23/governments-spending-overruns-amount-to-poor-planning-fiscal-council-says/
[2] https://www.macobserver.com/news/irish-government-reveals-how-apples-e14-25b-tax-windfall-will-be-spent/?utm_campaign=rss_everything&utm_medium=rss&utm_source=macobserver