Oireachtas Joint and Select Committees

Thursday, 22 June 2023

Committee on Budgetary Oversight

Fiscal Assessment Report: Irish Fiscal Advisory Council

Professor Michael McMahon:

-----creating difficulties today. That is true.

Going back to the answer we gave to Deputy Durkan, and as we have laid out in the report, it is the job of the Government to make an assessment about which of these areas are most in need, while keeping an eye on the need for countercyclical policy in aggregate. The Government can still decide to allocate money to specific sectors, projects and spending heads but it then makes choices to do other things to ensure that overall, it is not adding flames to the fire, if you will, of a tight labour market and hot economy. Those are the choices we always talk about. It is for the Government to identify those areas and allocate spending appropriately. As we stress, the Government's net spending rule is a net spending rule. If there are areas that need even more put into them, it is possible to spend more than the normal 5% spending restriction if tax measures are brought in.

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