Next month’s budget will see “significant increases in expenditure”, Simon Coveney has said. 

Amid surging levels of corporation tax receipts from multinationals, the State is forecast to record a surplus of around €10 billion. 

The Government has previously said it would not be “moral” to spend so much money at once and has pledged to set up a State Wealth Fund. 

Speaking on The Pat Kenny Show, Business Minister Simon Coveney said voters could also expect to see higher levels of public spending. 

“We [need to] respond to the needs of families, businesses and households in terms of costs of living pressures,” he said. 

“We’ve got to make sure that we spend money in a way that doesn’t fuel inflation any further but at the same time responds to the serious needs that’s out there [and are] the Government’s job to respond to. 

“We have a very strong and powerful economy that has a revenue stream and a tax take that allows us to do that. 

“We will see significant increases in expenditure - but it will be targeted in a way that tries to manage the inflation challenge as well and that’s what we’ve got to do.” 

Michael McGrath and Paschal Donohoe outside Government Buildings. Image: Sasko Lazarov / RollingNews

Minister Coveney was first elected to Dáil Éireann in 1998 and during his time as a TD saw the Irish economy boom during the Celtic Tiger and fall into a deep recession during the crash. 

Reflecting on the lessons he has learnt from that period, he said it would not be wise to increase spending by too large an amount.

“I mean, this Government is determined not to allow Ireland to fall back into a sort of boom and bust cycle where we spend money when we have it - until we don’t,” he said. 

“Then we have to dramatically cut back expenditure and all the pain and crises that causes. 

“We’ve seen that a number of times in my lifetime and this Government has got to make sure we end that cycle and that we invest money sensibly and that we put money aside for future crises - which will undoubtedly happen.” 

Unknown risks

The last time the Irish economy technically entered recession was in 2020 as a result of lockdown measures imposed to curtail the spread of COVID-19. 

With that in mind, Minister Coveney said the next recession is likely to be caused by something “outside the control of anything we do here in Ireland”. 

“The Irish economy is so globalised now that when there are international crises, when there’s geopolitical tension, that impacts on the Irish economy,” he said. 

“We’ve seen that Ukraine, whether that’s COVID, whether that’s Brexit. 

“These have been huge challenges over the last number of years that we’ve had to navigate.” 

The European Commission has forecast the Irish economy will grow by 5.5% this year and 5% in 2024.

Main image: Simon Coveney. Picture by: Sam Boal/RollingNews.ie