Ifac endorses budget with few equivocations

The Irish Fiscal Advisory Council (Ifac) and the Government rarely sing from the same hymn sheet but this is about as close as it gets. The budgetary watchdog endorsed Budget 2023 in pretty strong terms, saying it struck a difficult balance between helping people and not being too inflationary.

“The Government had a really difficult job in this budget and it’s had to strike a very difficult balance between helping people and helping the economy, but at the same time not putting too much money into the economy that would have contributed to higher inflation,” Ifac chairman Sebastian Barnes told RTÉ's Morning Ireland programme on Wednesday.

“And so, what they’ve done is they’ve pretty much stuck to the plans they set out in July and that’s pretty much consistent again with the fiscal rules they set out last year. And we think that balance struck is about right, so that’s why we welcome this budget in those terms,” he said.

Mr Barnes said the Government has managed to direct resources to those who need it most and more money is being targeted towards those people.

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If there was one quibble it was that a significant portion of the Government’s temporary €4 billion cost-of-living package wasn’t targeted or tailored to the people that most need it.

“Some of the measures are still relatively untargeted, including the electricity credits, the double child benefit payment, and the extension of the VAT and Excise reductions on fuels, gas and electricity,” the council said in its initial reaction to the budget.

Either way, the watchdog’s general endorsement contrasts with the shrill note it sounded just three years ago.

Back in 2019 it unleashed a torrent of criticism against the Government and Minister for Finance Paschal Donohoe for “repeatedly” breaching its own budgetary targets; for allowing public spending to advance at an unsustainable rate; and, worst of all, for acting in the same reckless manner as the pre-crash Fianna Fáil-led administration.

Relations seem to have warmed since then.