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State budget surveillance has sharply criticized the Government for failing "repeatedly" to meet its financial targets and for failing to prudently manage public finances.
In one of the most difficult valuations to date, the Irish Tax Council has stated that the improvement in the government's underlying fiscal position has indeed stopped since 2015, despite the favorable economic climate.
He claimed that the 2019 budget, which provides for an increase of spending of 4.5 billion euros next year, exceeded by 1.1 billion euros the target set by the government four months earlier in its summer economic statement, and was "not conducive to prudent economic and fiscal management".
The last time the government exceeded its fiscal target to this point dates back to 2015 before the last general election.
"This exceeds the limit of 3.5 billion euros for spending increases and tax cuts for 2019 that the council had deemed appropriate before the budget," said the watchdog.
In its report, the Council, the fifteenth since its inception in 2012, said repeated failures to prevent a "unbudgeted increase in spending," particularly in the health field, had left the finances of the country's finances. State threatened at the next downturn.
Stop the hole
The government on Tuesday night approved an additional budget of € 645 million to cover the excessive spending in the HSE this year, using a substantial portion of the state corporate tax windfall to fill the void in its budget. of health.
Ministers approved the measure despite the concerns previously expressed by a number of ministers about the persistence of excessive spending in the health sector. The HSE has now exceeded its allocation of nearly 2 billion euros over the past four years. He said the bulk of the deficit was the result of government decisions over which he had no control.
This year's credit overrun was attributed to increased medical negligence awards by the National Dispute Resolution Agency, a shortfall for private patients, and higher expenses in hospitals. and the disability and additional costs badociated with Storm Emma earlier this year.
"Failures to prevent unexpected spending increases have resulted in sustainable increases that are difficult to reverse and represent a repetition of the political mistakes of the past," the council said.
Modest increases
"Pressures in the health sector and elsewhere must be financed by sustainable tax revenues or by reducing spending categories elsewhere," he said.
The budget agency also baderted that the government's medium-term fiscal plans, which provided only modest increases in health spending and other categories of spending until 2020, while the demand for public funds grew rapidly, were not credible.
The reprimand comes after a warning last week from the Economic Cooperation and Development, that another cycle of prosperity and recession could develop in the Irish economy.
"Many risks"
While the outlook for the Irish economy remains strong in the near term, a slowdown in the coming years is "inevitable and that there are many risks," warned the finance advisory board.
Significant pressures on overheating could accumulate "if a faster than expected recovery, but welcome, in housing construction materializes," he added. The board has also warned that Brexit, whose exact result remains unclear, could prove more expensive than expected.
President Seamus Coffey said the government was increasing spending at an unsustainable pace and was not using the ongoing recovery to isolate the economy from the next downturn.
"The Irish economy is a region where circumstances can change rather quickly and we do not use positive recovery to create these fiscal buffers."
Although the risks to the economy are not as high as they were in 2006 and 2007, "he has some echoes," he said.
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