Budgets used to be events of theatre, events the nation tuned into. 

Some years the budget was so secret the Taoiseach himself barely knew what was in it before it was presented to Cabinet – I am thinking Charlie McCreevey and Bertie Ahern. 

Junior ministers got the bullet for faxing details of the Minister’s speech to the media a few hours in advance. 

These days, RTÉ’s correspondents report the main measures the night before, clearly flipping through much of the speech itself. 

The past’s secrecy and singular importance created a cauldron for political theatre. That has all changed. These days, the Government does a few mini-budgets a year and telegraphs the big policy announcements of the main event so far in advance that seasoned watchers can get their post-budget analysis pieces ready before the speeches themselves. 

The mini-budgets we do as a country torpedo budget discipline. Spending over €600 million more than you had budgeted less than 12 months before on education is a mini-budget. Bailing out hauliers, farmers and drivers to the tune of a billion or so is a mini-budget. A billion-euro contingency fund you know for sure you’ll use up is not much of a contingency.

The budget itself is an exercise in avoiding the elephant in the room. The Summer Economic Statement focuses on the increment. It tells us €8.5 billion will be spent, mostly on keeping current services going to the tune of €7 billion, and €1.5 billion or so will be spent on tax changes. The actual size of the government, from its voted (€125 billion or so) and non-voted spending (around €17 billion), is projected to be north of €142 billion. 

We will spend September arguing about 0.056% of the total spending in this country. Consider what a public policy failure that is. Just a 0.6% effort in the efficiency of government spending would trump all budget-day announcements. 

Doom and gloom aside, the strength of the economy is remarkable. The Fiscal Advisory Council noted that after adjusting for prices, output per person in Ireland grew from €50,000 to €62,000 in the space of just six years. That’s a 23% increase. Denmark, the closest country to us, saw output increase by 10 per cent. The economy is benefiting hugely from the AI roll-out and from the buoyant FDI sectors. Unemployment at or around 5% with strong and persistent surpluses is just about where every finance minister would like to be. 

And yet we don’t have an annual budget process; it’s closer to a quarterly one, and has been since Covid. As long as budget surpluses and shocks persist, the demand for insulation from these shocks from a public used to that insulation will not cease. And that will make the annual budget theatre mere Kabuki. 

As Thomas noted on Tuesday, the well-rehearsed scenario unfolds annually as follows: the fiscal watchdog barks, the Government spends, and multinationals pay. Ad hoc surges in tax revenue have shored up the Exchequer year after year: the Apple state aid court ruling in 2024, the front-loading of highly profitable pharmaceutical exports to the US ahead of potential tariffs last year, and now the start of top-up tax payments by multinationals subject to the global agreement on the 15% minimum corporate rate.

Another budget issue relates to spending. At this point, no one actually believes the spending envelopes outlined in the budget. The Government has consistently and persistently understated the amount of money it takes to run the State, to the point that overspending is almost baked into the system – if not the budgetary arithmetic. 

Consider this. In 2022, the Government planned to increase net spending by 5.3%. The figure ended up coming in at 12.8%.  Last year, the increase was supposed to be 7.2 % but ended up at 9.3%.

As the Fiscal Advisory Council noted in its pre-budget submission last week, the last time “spending was at or below budgeted levels was in 2013”.

“Spending has repeatedly been above the levels set out in the Budget in the previous autumn. Since 2014, current spending overruns have averaged 2.6% of the budgeted amount. In today’s money, that equates to €2.4 billion per year,” according to the report.

For the first seven months of the year, current spending rose by almost 8%. The Government has already revised its full-year spending forecast upwards by €0.7 billion. This was driven by overruns in education — which, as Ifac noted, were already evident at budget time — and the introduction of energy supports this year.

“Further overruns are almost certain,” according to the report, which argued that health spending is higher than budgeted in the first seven months of the year, something it said was “largely predictable”.

For example, hospital budgets for 2026 were set at almost exactly the same level as was spent in 2025, despite a rising population and growing demand for health services.

Given the growth rate of spending so far this year, the watchdog estimated that a further €1.4 billion of current spending overruns this year are likely – in addition to the €700 million of overruns that the Government has already acknowledged.

“One of the causes of overruns in recent years has been underestimating spending levels in the current year when budgeting for the following year,” according to the council, which added that if spending forecasts for 2026 are not revised up prior to Budget 2027, overruns are likely again next year.

The answer is not to pretend that governments can predict every shock, or that spending can ever be forecast to the last euro. It is to stop pretending that the figures presented in October are more precise than they really are. 

That is not fiscal discipline. It is Kabuki theatre.

And Ireland can afford to demand better.

Elsewhere last week…

He was CEO of two Denis O’Brien-owned stations when still in his 20s and now runs the country’s biggest independent radio and audio business. Chris Doyle talked to Alan about Bauer Media’s ambitions in Ireland – and taking on the national broadcaster.

A developer, a contractor, a Scarp process, and an unpaid performance bond. Francesca had the story of how a “high-risk” deal for a whiskey maturation facility in Meath led to a legal showdown with an insurer that refuses to pay up.

Acquired by private equity in 2019 and mired in a high-profile legal battle, the story of the building that once housed the Central Hotel reveals much about the financial machinations changing the capital’s streets. Michael took a deep dive into why The Hoxton embodies the pressure on Dublin’s nightlife.

Horse Sport Ireland applied for the appointment of an interim examiner to rescue the national governing body for showjumping and equestrian sports. An independent expert believes it can be saved if restructured. Tom revealed how it reached such a perilous state of affairs.