2025-12-18

169. Deputy Ged Nash asked the Tánaiste and Minister for Finance the contents of the Government’s medium-term economic framework; the reasons for the delay in producing the plan; and if he will make a statement on the matter. [73642/25]

It is a year since the new Dáil met and almost 11 months since the new Government was formed, yet we still do not have the medium-term economic plan that this Government is obliged to submit to Brussels. The media were briefed earlier this week that the Cabinet would approve the plan on Tuesday. Is that the case? Has the plan been approved and when will it be published?

Yes, it has been approved and it will be published tomorrow. I am very happy, of course, to provide any advices or technical briefings that are required by Opposition spokespeople early in the new year, whenever required and in the appropriate forum. The medium-term fiscal structural plan will be published tomorrow. In line with all relevant European regulations and procedures, the plan will be submitted to the European Commission shortly thereafter. Although each member state has discretion over the content of its medium-term fiscal structural plan, MTP, information is required on three core elements: the fiscal strategy; investment plans; and structural reforms. Of these, the fiscal strategy is clearly the key component. As Deputy Nash is aware, the medium-term plan is a highly consequential document. It required considerable thought and analysis. The plan will reflect current macro-economic conditions as well as Government decisions and priorities. The merit of medium-term fiscal planning is clear for a number of reasons, and I do not need to convince anyone of that. It provides clarity, it prevents in-year drift, and medium-term plans can help mitigate the vulnerability of Ireland's tax revenue base. Likewise, medium-term planning can also assist in preparing the public finances for fiscal challenges facing the Irish economy, such as the impact of population ageing, as we see in the Future Forty report we published last month, and crucially a credible medium-term strategy provides certainty on the domestic budgetary policy stance that can help boost private sector spending on capital investment. This plan will set out the Government's economic and budgetary strategy for the remainder of this decade, with a clear objective to support further sustainable gains in living standards for all in the years ahead.

There is simply no valid reason this plan has been delayed for several months. We were told to expect this plan in the summer. We expected to see it before the budget. We did not see it before the budget. I think at this point, politics and media management is getting in the way of the publication of the plan. It will be published tomorrow. That is an interesting and important point. It should have been published this week so the Dáil would have been able to scrutinise and interrogate the plan and have a full debate on it. It is not an abstract plan. It will affect every person, every business and every citizen of this country over the next four to five years. There is, unfortunately, a pattern here when it comes to fiscal management and the production of data. We in the Opposition all expressed concerns, for example, about the reliability of the information received on existing levels of service before the budget. There were no spending review papers this year. We have a range of different concerns. It is not acceptable to me that on the day of the recess, we are being told that a publication of this importance is being published when the Dáil rises.

I take the point. It would have been optimum to have an opportunity to debate it before the recess. We did make an intentional decision not to publish this earlier in the year. I was not the Minister of Finance but I was involved in the decision as a party leader. The rationale behind it, which I think was correct, was to wait and see what the international environment looked like from a tariff point of view. There was different debate and different commentary on this and we decided to publish a summer economic statement that had a one-year horizon. This was different from previous years. We decided to publish the budget. When there was a degree of trade certainty - insofar as there ever is in this world - or certainly more than there was earlier in the year, it gave us more confidence to publish a fiscal strategy that is a binding document. There will be plenty of time for the Oireachtas to interrogate it. I am very happy for Opposition spokespeople on finance to be provided with any briefings they require. It did need to go to the Cabinet this week. It went to Cabinet and it will be published this week too.

The Minister has laid out the principles of what we can expect to see tomorrow. We knew that already. We understood that. Those of us who are members of the Oireachtas Committee on Budgetary Oversight met with the Irish Fiscal Advisory Council, IFAC, this week. I know the Tánaiste met with them when he was appointed.

I did.

They were, rightly, scathing about this Government's approach to budgeting. They said that the Government was budgeting like there was no tomorrow. The Tánaiste acknowledged there are no forecasts or horizons beyond next year. That is no way to budget. Our view in Labour is that key to this plan is that we should be prepared to reflect on the plan. Perhaps the Tánaiste can confirm to the House this afternoon whether the plan will include the commitment to the introduction of a net spending rule, net of tax changes. That would be really important. The Tánaiste will recall that the previous Government introduced collectively a spending rule of 5%. That rule was more honoured in the breach. It was not based on any evidence at all or anchored in any plan. We should move to multi-annual budgeting in order to give those who are planning public service provision more certainty. Will the Minister commit to multi-annual budgeting in the plan tomorrow and to the introduction of a net spending rule? In other words, net of tax changes.

Without being smart, it depends on how you define multi-annual budgeting. What this will enable us to do is set out a horizon for spending levels out to the end of the decade. That provides greater certainty for the Department of public expenditure and others to engage multi-annual funding, which interestingly is something IFAC is very supportive of. It made a very positive difference when we introduced it in health for a two-year period. I met representatives from IFAC. I do not wish to speak for the council, but its main requirement is that the Government should set out a medium-term plan and stick to it. I think I am correctly paraphrasing what was said. Governments can decide what the level of spending should be, but IFAC's concern - and, certainly, what I took from it - is that it is important that when the Government publishes a medium-term plan, it sticks to it. There is a requirement for a net expenditure growth path. Net primary spending is a technical definition of public expenditure defined as general government spending adjusted for interest expenditure, discretionary revenue measures, expenditure on programmes matched or co-financed by the European Union, cyclical elements of unemployment benefit and one-off temporary expenditure items outside the control of government. There will be a commitment to that in the plan tomorrow.