The parties spending plans (part II)
There is a multi-billion black hole in each of the major parties' spending plans
Shortly after The Journal yesterday republished the piece I’d written earlier in the week on the parties’ spending plans, I got an email from the Fine Gael press office to say that while they “felt it was a fair piece overall” they thought I had overstated how much they were planning to spend on current (day-to-day) voted expenditure by 2030.
I had had to back this out from their manifesto as it wasn’t provided directly (and they hadn’t gotten back to my request for info), and so had assumed it was the balance of what they had said total voted spending would rise by in 2030 less what they had promised to increase voted capital spending by. This gave a figure of €122.7 billion of current voted spending in 2030, up from €90.5 billion in 2025.
They have now clarified that their total voted spending figure includes the extra €14.1 billion from the ECJ Apple case ruling that they are planning to spend on infrastructure over 5 years. As a result, Fine Gael say their current voted expenditure figure for 2030 should instead be €116.9 billion: an increase of €26.4 billion from its 2025 level rather than the €32.2 billion I had calculated.
The Figure below shows that given these revised numbers, there is quite a big difference between the parties in terms of their current expenditure plans (the striking cumulative capital spending plans figure in my original post is unchanged). Fine Gael intend to stick to the plans outlined in the Budget 2025 EFO (increasing current voted spending to €116.9 billion by 2030), while Fianna Fáil and Sinn Féin are both planning on increasing current voted expenditure more rapidly: to €121.6 billion by 2030 for Fianna Fáil, and €124.8 billion by 2030 for Sinn Fein. As discussed in the previous post, these are all very large increases in current spending, and all very reliant on the corporation tax good times continuing.
A 5 billion black hole in Fine Gael’s spending plans
However, the revised numbers raises a crucial issue about the credibility of Fine Gael’s spending plans. At the €32.2 billion increase in current voted expenditure by 2030 I had calculated, there was scope to cover the estimated €9.3 billion cost of the current spending commitments in their manifesto alongside the €22.6 billion that the Irish Fiscal Advisory Council estimate is needed to cover the cost of maintaining the existing level of services: the “expected costs of demographic changes and inflationary pressures on the public services [including public sector pay], as well as the costs of maintaining welfare rates relative to wages” (see section 2.3 here).
At €26.4 billion there is not. Rather, there is €5.5 billion black hole in Fine Gael’s spending plans by 2030: the difference between what they say current spending will increase by (€26.4 billion) and the sum of the cost of their new spending commitments (€9.3 billion) and what the Fiscal Council say is needed to maintain the existing level of services (€22.6 billion).
Fine Gael have instead referenced a figure of €15.5 billion for the cost of maintaining the existing level of services alongside €1.7 billion in an unspecified contingency.1 They provide no details on this, though their Finance spokesperson has made clear they see it as covering the cost of a future public sector pay deal.
This simply isn’t credible. We have an independent Fiscal Advisory Council who have clearly and transparently calculated the cost of maintaining the existing level of services. Instead Fine Gael choose to use a figure based on their own - unpublished - workings that is more than €5 billion per year lower!
Fianna Fáil and Sinn Féin also have a black hole in their spending plans
Fine Gael are not alone of the major parties in having a black hole in their plans for the public finances. Both Fianna Fáil2 and Sinn Féin3 have penciled in just €20 billion per year by 2030 to provide for the cost of maintaining the existing level of services, €2.5 billion per year less than the Irish Fiscal Advisory Council says will be required.
On top of this, Fianna Fáil estimate a cost of €15.2 billion extra per year by 2030 for the new current spending commitments in their manifesto. Adding this to even their optimistic estimate for the cost of maintaining the existing level of services comes to €4.1 billion more than the €31.0 billion their manifesto says current voted expenditure will rise to by 2030. Perhaps they intend that the difference is made up by €3 billion in unspecified tax compliance and efficiency measures referenced in the manifesto, along with €2.2 billion in unexplained “Second round “Buoyancy” effects”. Again, this simply isn’t credible.
Sinn Fein also have a question to answer about what the reference to the National Development Plan in their €20 billion pre-committed figure relates to, and if this means they are making an even smaller provision for the cost of maintaining the existing level of services. I suspect this is a typo or mistake on their part given they haven’t exactly been shy in pencilling in large increases in capital spending, but that still leaves a very large €2.5 billion gap with the Fiscal Council estimate.
We deserve better
To summarise, all three major parties have multi-billion black holes in their General Election spending plans. These appear largest for Fine Gael, although they are saying they will increase current spending by less so in that sense have “more” space to overshoot. Conversely, the black hole appears smallest - but still large - for Sinn Fein who are saying they will ramp up spending by most.
This raises serious questions for the three major parties about the credibility of their spending plans as we enter into very uncharted waters. For many years there has been talk in policy circles of the need for party manifestos to be objectively costed and tested (e.g. most recently by John FitzGerald in The Irish Times). The mess that is the major parties’ 2024 General Election manifestos proves this need.
Fine Gael manifesto, p.116.
Fianna Fáil manifesto, p.193.
Sinn Féin manifesto, p.169