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Ireland to increase public spending by nearly 7% in pre-election budget

July 10, 2024

The Irish government has announced a nearly 7% increase in public spending as part of its pre-election budget. This move comes despite a previously set rule in 2021, which capped public spending growth at 5% annually. The government cites a faster-than-expected population increase as the primary reason for this deviation.

Finance Minister Jack Chambers stated, “There remains the continuing need to improve public services and infrastructure, particularly in the context of a growing population and economy. The government has adapted its fiscal strategy to take account of this, to support the continued delivery of better healthcare services as well as accommodate higher capital spending.”

The Summer Economic Statement outlines the parameters for the October budget, which will be the last before the upcoming election, required to take place by the end of March.

The overall budget package will total €8.3 billion (£7 billion), with €6.9 billion (£5.82 billion) allocated for spending and €1.4 billion (£1.18 billion) for taxation measures. Day-to-day spending is set to rise by 6.4%, while infrastructure and investment spending will see a 10.6% increase.

Additionally, the health service will receive an extra €1.5 billion (£1.27 billion) this year. This follows news that the Irish Department of Health anticipates a €1.1 billion (£845 million) overspend this year.

Public Expenditure Minister Paschal Donohoe explained that more than €5 billion (£4.22 billion) of the additional spending is earmarked to cover existing service levels, including costs from pay deals and previously decided infrastructure projects. Approximately €1.8 billion (£1.52 billion) will fund new measures to be announced in the budget.