Getting a grip on overspending in the health budget and not relying on corporate tax receipts to drive overall spending could help cut debt levels, the European Commission has said.
These measures could help the economy weather any external shocks, the commission said in its annual Country Report on Ireland.
It endorsed the proposed ‘ambitious reform’ to the health system under Sláintecare but warned that progress may be “endangered by the difficulties in improving budget management in the health system to avoid recurrent overspends”.
The report is part of the commission’s regular assessments country-by-country of the risks facing member states.
On housing, it noted the efforts of the Government to boost supply but said there were questions over whether the construction industry could deliver the number of new homes to meet demand “in a timely manner”.
The property-tax based on values that did not reflect property prices were a concern, it said.
The report said that after rapid growth the pace of house price inflation had slowed in recent times, saying there was “no clear” evidence that prices were overvalued.
The commission again focused on the large amounts of tax revenues the Government collects from multinationals. “Ireland’s tax rules appear to be used by multinationals engaged in aggressive tax planning structures, but some steps are being taken to limit such practices,” it said.
Elevated levels of private debts were being eased by the high level of economic growth and household debt “appears broadly in line with fundamentals”, the report said. Government debt will also continue to fall.