McGrath defends Govt spending ahead of Budget 2025

Former minister for finance Michael McGrath has defended Government spending ahead of next month's budget.

The Government has breached its own rule set in 2021 of limiting annual growth in spending to 5% per year.

Earlier this month, the Irish Fiscal Advisory Council warned in its pre-budget statement that ministers were "needlessly" adding pressure to the economy by repeatedly breaking a rule of limiting spending growth to 5%.

While in July, the Governor of the Central Bank urged the Government to stick to the 5% in the upcoming budget.

However, Mr McGrath, who was recently appointed EU Justice Commissioner, said it was "important to remember the rules were devised at a different time".

He told RTÉ’s The Week in Politics: "Shocks that were unforeseen at the time materialised - the war in Ukraine, the huge spike in inflation which has tapered off thankfully and is at a much lower level now - but that required a fiscal response, extensive supports to households and businesses. So that was unforeseen and that had to be responded to.

"If you look at the big picture, as I now have to do as I get ready to come into a new role, Ireland economically is in a good place, the public finances have been well managed in recent years and I have no doubt under [Finance] Minister [Jack] Chambers and [Public Expenditure] Minister [Paschal] Donohoe that will continue to be the case and the public will have their say in a general election in the months ahead.

"What we did do during my time in the department, working closely with Paschal was setting up the two new long-term funds - the Future Ireland fund and the infrastructure fund."

McGrath trusts Martin judgement

Tánaiste Micheal Martin this week told RTÉ’s Morning Ireland that Fianna Fáil would not go into a coalition with Sinn Féin as long as he is leader of the party.

Asked if this was would hand Fine Gael a monopoly in Government, Mr McGrath said he trusted Mr Martin’s judgement.

He said: "Micheál Martin’s judgement over a long period of time has proven to be very sound and very wise and I think he was an outstanding Taoiseach and that’s been recognised by people who would not be supporters of our party.

"I trust his judgement and his instincts on this and he has always brought it back to the substance, policy and about delivery and working for people and getting things done in the interest of the country and I trust his judgement because I think he’s exercised it very shrewdly over the last number of decades."

Asked if he has his own ambitions on becoming Fianna Fáil leader, Mr McGrath said his focus was on his new portfolio as the EU’s justice commissioner.

He said :"My focus for the next few weeks is will be on preparing for a tough grilling at the European Parliament, it’s not to be taken for granted so I have means of material to work my way through and I look forward to discussing the priorities of the MEPs and making it clear to them I’m someone who can be worked with."

He added: "I have to move into a different space in terms of my political work – I'll be moving to the European Commission where you have to be independent of all member states.

"It is a political office and you are allowed to remain a member of a party, and I will of course remain as a member of Fianna Fáil and will be as active as I’m allowed to be."