Mr. Seamus Coffey:

I certainly highlighted a number of issues, but I do not know whether we would go so far as to describe it in such terms. There is no doubt that there are deficiencies in our approach at present. To focus on one that the council would like to highlight, it is the idea that our fiscal policy should be countercyclical. We have a fiscal policy that is, essentially, being implemented out without an anchor or some sort of guide or guard rail to facilitate it being countercyclical.

Deputy Nash mentioned some of the publications the Government has produced recently. There was one part of the summer economic statement that generated an amount of surprise on our part. This is where it set out that the package for 2026 would be the €9.4 billion, which has been referred to, but that if there were to be a slowdown, perhaps due to tariff-related uncertainty or other shocks hitting the economy, the package would be smaller. At a time when the economy might need more support, the Government has indicated that less would be provided, further highlighting the potential procyclical nature of our budgetary policy. This is perhaps an implicit, or otherwise, recognition that there are vulnerabilities in the public finances and that we should have the capacity to react to a downturn by offering more budgetary support. If the Government, in its summer economic statement, is indicating that if there were to be downturn, the size of the budgetary package would be smaller, it would go against all the standards as to what a countercyclical policy should be.

The document published last week certainly was not an expenditure framework. It contains some useful analysis but does not set out a framework or a sustainable rate of expenditure. It does not outline the roadmap for fiscal policy over the duration of the Government's lifespan. There is scope for the EU's new approach to help with the medium-term expenditure plan. Most EU countries published such plans in 2024. Ireland published one, but it was a very technical document that was a bit like what we got last week. These can be revised if there is a change in government or a general election. Clearly, we had both. However, almost 12 months after the general election, the revised medium-term expenditure plan has not been published. It is important that the medium-term expenditure plan gets domestic ownership because we are not likely to get significant oversight or significant enforcement at EU level.

Even though the framework is based on medium-term spending, in the background are still the reference values of 3% of GDP deficit and 60% of GDP debt. If Ireland were to trigger alarm bells at EU level, running an overall deficit of 3% of GDP would, given the current figures, be equivalent to a deficit of €16 billion. That is a €25 billion deterioration compared with where we are now. The EU could assess Ireland's budgetary plans on the basis of these figures, which are not appropriate for an Irish context. From the council's perspective, we hope that a revised medium-term expenditure plan is published. The programme for Government promised it with the summer economic statement, but we did not get it. We are now asking for it with the budget. We also hope that once published, it will be a credible document that will be adhered to. This needs domestic ownership, whether by the fiscal council assessing it or the Oireachtas holding the Government to account, and the Government following through on the plans it sets out.