According to the government’s latest economic and fiscal forecasts, a surplus of €16.2 billion is expected next year.
The figure highlights how much the government has a budget and a lot of cash to spend next year as it gears up for general elections scheduled for late next year or early 2025. .
The document forecasts a budget surplus of €12.9 billion next year. However, factoring in other factors, including the huge social insurance fund surplus, the EU is expected to use €16 billion in general government balances.
However, those numbers are likely to be adjusted later in the year when next year’s spending decisions are made.
The surplus continues to be supported by strong corporate tax revenues. This year’s projected surplus could be around €10 billion, including remittances to the government’s Rainy Day Fund.
An update to the Stability Program, the main economic document required under EU rules, was released on Tuesday by Finance Minister Michael McGrath and Public Expenditure Minister Pascal Donohoe.
Last year, the government was able to offer more than €11 billion in budget day packages, combining regular spending promises and one-off giveaways. Figures released yesterday show that ministers are likely to be in a position to repeat last year’s giveaways this year.
Both McGrath and Donohoe struggled to downplay the topic of big-budget prizes during yesterday’s earnings call.
They particularly warned of the unreliable nature of many corporate tax receipts and the danger of building repeated spending commitments on the back of revenues that may be temporary.
“Half of the corporate tax revenue is windfall by nature and you can’t rely on it,” McGrath said.