Watchdog warns Budget 2017 may break key EU rules

Irish Fiscal Advisory Council says Government is set to miss key borrowing target

Watchdog warns Budget 2017 may break key EU rules

Public Expenditure Minister Pascal Donohoe (right) with Finance Minister Michael Noonan at Government Buildings following the announcement of Budget 2017 | Image: RollingNews.ie

There is a warning about the higher than expected spending increases in Budget 2017.

The head of the Irish Fiscal Advisory Council is warning that the Government is set to miss a key borrowing target for this year.

John McHale was speaking to the Irish Times, ahead of the council's official budget report - which is due to be released in the coming weeks.

The independent budget watchdog says the Government had gone beyond what was prudent, and was set to breach key EU rules.

Spending increases and tax cuts of €1.3bn were announced in the Dáil yesterday by Ministers Michael Noonan and Paschal Donohoe.

Among some of the main initiatives announced were a new 'help to buy' scheme which will see first time buyers entitled to a 5% grant on newly-built homes, a cut in USC for all workers, and plans for almost 4,500 additional frontline staff to be recruitment.

In-depth: Budget 2017

There will be a 7.4% increase in health spending - to a total of €14.6bn for next year.

And €319m is to go towards spending on local and regional roads, while €15m will be used to progress the National Broadband Plan.

Meanwhile, the public expenditure minister says there will be no problem filling the new public jobs announced yesterday.

Plans for 1,000 new nurses, 2,400 new teachers, and 800 new Ggardaí were unveiled at a time when nursing unions continue a campaign to secure better working conditions for new recruits.

Minister Paschal Donohoe is happy people will be found to fill the roles.