Thursday 26 April 2018

Budget to reveal extent of 'hidden space' priorities

The Government has more freedom of action in Budget 2018 than voters believe - but there's a catch

Taoiseach Leo Varadkar (right) and Minister for Public Expenditure Paschal Donohoe
Taoiseach Leo Varadkar (right) and Minister for Public Expenditure Paschal Donohoe
Dan O'Brien

Dan O'Brien

Over the next week there will be a lot of talk about how budgetary rules - both EU and national - prevent the Government from doing this and doing that. Let's start this pre-Budget column by setting out some facts.

Neither set of rules puts any limit on public spending increases, provided those increases are funded by tax increases. Equally, the Government can cut taxes as much as it wants, provided it reduces spending in line with the cost.

'To govern is to choose' goes the old saw. The rules oblige governments to make choices, instead of allowing them to hoodwink voters with tax cuts and/or spending increases paid for with borrowed money which they, and their children, will have to service and repay.

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