Updated 12.00

A member of the Cabinet is insisting the coalition's economic policy is "sensible".

The Fiscal Advisory Council has declared Budget 2016 a deviation from prudent economic policy.

It says the coalition's decision to add in an extra €1.5 billion in spending has caused them to be concerned that the mistakes of the past will be repeated.

Transport Minister Paschal Donohoe says the Government is meeting all requirements as laid down by Europe:

"We now have a target to reduce our borrowing as a percentage of national income to below 3% for next year. That will be delivered."

"And Fine Gael and the government as a whole will continue to adopt the most sensible approach possible to our national economy because we want to make sure that the spending behaviour of the past does not wreck the recovery that is now underway."

The Fiscal Advisory Council warned the Irish economy is experiencing strong recovery, but the pace of future growth remains uncertain and our high levels of debt mean we have limited room for manoeuvre.

The Council warns we are significantly at risk of breaking budgetary rules because there is no margin for overruns - despite the sustained pattern of overspending in health.

Past mistakes

John McHale from the Fiscal Advisory Council told Newstalk Breakfast that making politically-motivated budgetary decisions risks repeating past mistakes:

"Certainly politics comes into this. I think everyone is in favour of prudence in making sure that we don't repeat past mistakes, but prudence can be a poor competitor when it comes to offers of tax cuts or expenditure increases. Part of our role is to tilt the balance back towards prudence in the overall considerations."