The Fiscal Advisory Council is raising red flags about the State’s fiscal health, warning of “significant risks” due to new EU rules on government spending and Ireland’s growing dependence on multinational tax revenues. Dr. Eddie Casey, Chairman of the council, highlights that the new rules overlook Ireland’s increasing reliance on corporation tax and provide little external scrutiny, leaving the country vulnerable. The focus on Gross Domestic Product (GDP) is criticized in favor of Gross National Income (GNI) which reflects a more accurate picture of Ireland’s finances.
The concern over the Government’s heavy reliance on tax paid by a few multinational corporations is highlighted, with Dr. Casey cautioning that any sudden shift in company fortunes or policy changes could have severe repercussions. Upholding the new EU rules is crucial, with calls for a commitment to the Net Tax and Spending Rule to safeguard Ireland’s public finances.
As Ireland navigates these challenges, transparency and adherence to fiscal rules will be essential to ensure economic stability in the face of uncertainty.