Government is warned it will have to cut spending or raise taxes

Public finances will be ‘very tight’ over the coming years due to changes made in the last budget, according to fiscal watchdog

Minister for Finance Paschal Donohoe and Minister for Public Expenditure and Reform Michael McGrath announcing Budget 2021 last year which provided for a €5.4 billion increase in exchequer spending. Picture: Sasko Lazarov/RollingNews

The government has been warned it will have to increase taxes or cut spending to pay for any new policies introduced on a permanent basis.

Publishing its latest report, the Irish Fiscal Advisory Council (Ifac) said the public finances would be “very tight” over the coming years and added that the state had no room to finance permanent policy changes due to the large increase in recurring spending in this year’s budget.

Sebastian Barnes, the ...