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High-risk route to recovery if future leaders don't err on side of caution

Spend, spend, spend without raising revenue is a dangerous policy, the would-be coalition partners have been warned, writes Hugh O'Connell

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The Irish Fiscal Advisory Council (IFAC) was set up after the financial crisis to advise the Government on how to avoid the sort of policy decisions that led to the collapse of the State's banking system in 2008 and the bailout two years later.

As the economy roared back from recession and took off like a rocket, as Michael Noonan once predicted it would, in the 2010s the Fine Gael-led government politely ignored the IFAC's warnings to avoid expansionary budgets and ramped up spending on things like pensions and cutting taxes. Only in the last budget was a more cautionary approach taken, with tax cuts shelved in the face of a hard Brexit.

The Covid-19 pandemic is now dealing a serious blow to the economy (which may yet be compounded by a no-trade deal Brexit). Yet Fianna Fail, Fine Gael and the Greens are promising major investment in health, housing, transport and climate action while not increasing taxes or cutting welfare.