{
  "id": 11619625,
  "title": "Govt breaking its promise on spending increases",
  "url": "https://urgent.news/2026/10/03/govt-breaking-its-promise-on-spending-increases",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-03T06:00:01.000Z",
  "source": {
    "name": "RTE News",
    "slug": "rte-news",
    "url": "https://www.rte.ie/news/business/2026/1003/1593858-budget-spending-analysis/"
  },
  "original_language": "en",
  "account": "For years, Minister for Finance Simon Harris and Minister for Public Expenditure Jack Chambers had vowed that an end to unending spending overruns was under way. They claimed the era of wasteful departmental spending was over. Harris said that spending allocations were being increased, and departments would now need to operate within their budgets. Chambers stated that continuous overspending by inefficient departments must come to an end. They drafted a Medium Term Fiscal and Structural Plan, setting annual spending caps, which Ireland had to submit to the EU. In 2026, the plan foretold a maximum of a 7% increase in spending, which was a significant jump compared to other EU nations. However, as the Budget looms, it is evident that Ireland will surpass its spending limit in 2026. So far this year, spending has risen by 7.8%, against a projected 6.3%, according to the Irish Fiscal Advisory Council. The Finance Department released a report last night projecting public finances for 2026, revealing that the coalition will exceed its spending ceiling by €1.5 billion. Roughly half of this extra spending is attributed to the Health Department being over budget. On Budget Day, when the government announces the Christmas Bonus – a double social-welfare payment in December – it will further add to the budget overruns. Interestingly, this bonus is not funded annually, making it an extra item when confirmed by the Public Expenditure Minister. The additional spending comes from the rapidly growing corporation tax paid by multinational corporations. There are two types of corporation tax: one relates to activities within Ireland, while the second, termed \"windfall\" tax, is generated abroad and taxed in Ireland. The latter is particularly vulnerable, as a US-headquartered company’s decision to shift profits elsewhere without closing a factory or losing a job could significantly impact Ireland's tax revenue. Stripping out windfalls from public finances would leave Ireland with a €7 billion deficit instead of a surplus this year, as per the Central Bank. While Ireland's heavy dependence on corporation tax is widely acknowledged, the Economic and Social Research Institute warns that it is not only corporation tax that could be problematic if multinational activity fluctuates. Income tax is buoyed by multinational employment, and VAT receipts are partly inflated by government spending, increasing household and business consumption. In essence, multinationals' activities support the entire public finances. However, the spending surge and rising energy costs due to the Iran war are creating mounting concerns. This has caused the yield on US ten-year bonds to soar to 5.2%, with homebuyers now paying 7% on mortgages in America. Ireland is not immune to these market fluctuations. The interest rate on Irish ten-year debt has risen from 3% to 3.6% since February. The prudent move would be for the government to announce a larger surplus in the upcoming Budget. However, despite the Coalition's talk of fiscal responsibility, it seems they will continue to exceed their spending limits.",
  "summary": "Ireland was supposed to limit spending increases to 7% in 2026, but the Government is failing to meet its own already enormous target and using windfall taxes to cover the overrun.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}