Increasing spend ‘won’t necessarily’ improve public services, Taoiseach warns

By Cillian Sherlock, PA

Increasing spend will not necessarily improve public services, the Taoiseach has warned.

Simon Harris also said there must be extra funding for a cost-of-living and welfare package in the next budget, along with indexed tax bands so that people “do not drift into the higher rate band”.

Meanwhile, finance minister Michael McGrath also said there would be further measures on personal taxation in the upcoming budget but warned that the emphasis should move away from “exceptional” cost-of-living measures.

Mr McGrath said: “We are in a different place when it comes to inflation and I think overall the emphasis should be on permanent changes and permanent measures to our expenditure and taxation framework rather than a large series of one-off measures.

“But that’s not to say that we made any specific decisions about individual measures or specific cost-of-living supports.”

The finance minister also raised concern of “deep uncertainty” in the global market as he attended the first day of the National Economic Dialogue (NED) in Dublin on Monday.

In his opening speech to the NED, Mr Harris said that there was a need to reduce costs across the public service.

He said: “Our experience over the last few years has taught us that merely spending extra money on services does not necessarily lead to better outcomes.

“If it was just about writing another cheque, many of the challenges society faces would no longer exist.

“Too often our political discourse descends into some sort of transactional bidding war: who is going to give another fiver here or another fiver there.

“Where one political party or one commentator says more money is always the answer to the problem at hand.

“Yes, more funding. Yes, more investment. Yes, social welfare supports are absolutely vital.

“But investment in public services also needs to be matched with a reimagination of our public services.”

The NED is a key event in the annual budget process where Government ministers chair a number of breakout sessions with representatives from the business sector, community groups and unions.

The meetings examine different areas including public services, climate action and income inequality.

Mr McGrath told the NED that the budget would continue reform of personal taxation.

“Building on the work of last year and the year before when we changes to credits and the bands and we had a reduction in the rate of USC last year.

“It is important because we have a competitive personal tax system here in Ireland.

“That is a factor when it comes to investment decisions that are paid internationally.”

Mr McGrath said the Budget will be held in October.