Taoiseach Leo Varadkar says the government listens to experts in all sectors and sectors to prepare the budget, but it drives a society, not just the economy.
Responding to warnings by the Central Bank and the Irish Fiscal Advisory Committee (IFAC) of inflation risks in the 2024 budget, Mr Varadkar cited bodies such as the central bank saying the economy would not grow as fast as previously forecast. And that’s not necessarily a bad thing.
„A long time ago people talked about the economy overheating, growing too fast. So it’s encouraging that the central bank is now saying that we don’t need to worry as much as we did in the past. In relation to inflation, what they’re saying is true,” the Taoiseach told reporters in New York, where he was addressing the United Nations General Assembly. attended.
“If people raise wages, if they raise people’s pensions, if they give more money to people on welfare, carers or the disabled, it will increase inflation. What does that really mean? You should never do that?”
Public Expenditure Minister Pascal Donohoe in Dublin has responded to warnings from the Central Bank and IFAC about inflation risks in the 2024 budget, insisting the government’s spending plan will stay within the limits he and Finance Minister Michael McGrath set earlier this summer.
Mr Donohoe said the government would run a „significant” surplus in 2023 and 2024.
„The concern of the central bank and IFAC is that we will spend the revenue we get from corporate tax on day-to-day expenses,” he said, adding that both bodies have warned of the risk of inflation.
He asserted that the spending plans for Budget 2024, to be released on October 10, will be within the guidelines set out in the Summer Economic Statement.
He and Mr McGrath outlined a total package of €6.4 billion. They earmarked €5.2 billion in additional public spending, along with €1.1 billion in taxation measures. Core spending will increase by 6.1 percent in 2024, and an additional 2.25 billion euros will be allocated for capital infrastructure projects over the two-year period between 2024 and 2026.
He announced details of expected progress on the state’s 50 biggest infrastructure projects under Project Ireland 2040 at Government Buildings. The document outlines how those plans will proceed over the next decade and a half. Objectives to provide businesses with insight into opportunities that may arise and when they may arise.
The document sets out that construction of the Metrolink could begin in 2025 and continue into the early 2030s. Similarly, the first of the four distinct projects in Dart Plus could start in 2024, but again it could take a decade or more to complete.
Similar timelines have been set for another multibillion euro project, Bus Connects Dublin, which is currently estimated not to be completed until 2030 or later.
Among the biggest road projects from Cork to Limerick, the M20 has a construction start timetable of 2027 (completed in 2031), while the Galway City Ring Road (currently the subject of a new decision by the planning committee) has a tentative timetable for construction. It will start in 2026 and be completed in 2029.
It predicts a completion date of 2024 for the construction of the National Children’s Hospital.
Mr Donohoe was asked about the drop in foreign visitors to Ireland by a third this year, and the fact that many hotels were accommodating Ukrainian refugees was a factor.
„Many hotels play a role in providing accommodation for refugees and asylum seekers,” he replied. „We’re trying to provide shelters for 90,000 people who weren’t here a year ago.”
If the government does not do so, they risk becoming homeless, he said. He pointed out that the hotel industry was receiving money to house the refugees. „That being said, using hotels to provide accommodation in the medium term is not a sustainable position.” However, he accepted that providing alternative locations would take time.
Mr Donohoe said VAT had been around 9 per cent for many years and the current 13.5 per cent was „where it should be in the future”.