Government's Overspending Could Add €1,000 To Household Bill

The Irish Government’s overspending is leading to higher living costs, with the Irish Fiscal Advisory Council (Ifac) estimating an additional €1,000 per year on household bills.

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Research suggests that the Government’s breach of its own spending limits could increase consumer prices by 1.9% next year. While households may see benefits like electricity credits, these gains could be overshadowed by rising indirect costs.

Established in 2021, the National Spending Rule was designed to cap annual spending growth at 5%. Despite this, the Government has exceeded this limit each year since.

Fiscal Watchdog Warns Government’s Overspending Risks Future Economic Stability

In its recent pre-Budget report, Ifac expressed concern that the Government’s approach is adding strain to an already overheated economy.

Government's Overspending to make troubles for households

Seamus Coffey, Ifac’s chair, highlighted the importance of sticking to the spending rules. He warned that failing to do so could result in serious challenges, especially if the economy slows.

The current budget surplus is mainly due to windfall corporation taxes, which Ifac notes could conceal deeper fiscal issues. Without these taxes, the budget might be in deficit.

Taoiseach Simon Harris has promised a cost-of-living package in the upcoming Budget, though Ifac warns that such measures could further drive up consumer prices.