The Government has published spending increases for the next five Budgets in a major change in financial planning.

The new plan says expenditure will increase by 7.2% next year before steadily declining each year until 2030.

The new strategy says in 2026 current spending will rise by 5.8% while capital spending will increase substantially by 15.1% as it invests in infrastructure.

The expenditure increases will be a total of 6.5% in 2027, 5.8% in 2028, 5.4% in 2029 and 5.2% in 2030.

“These are binding ceilings”, said Department of Finance’s chief economist John McCarthy. He said breaching the limits would be “reputational rather than legal.”

It means there will be an average annual spending increase of 6%.

The Medium Term Fiscal and Structural Plan was launched by Minister for Finance Simon Harris and Minister for Public Expenditure Jack Chambers.

The plan is a requirement under EU law and will be submitted to the European Commission in the New Year.

It is expected to be formally adopted in March by the Ecofin meeting of EU finance ministers.

Minister Harris said: “This is a fundamental change.”

He added: “We are determined to stick with this.”

He said the key is to prevent “drift” in spending during the year.

He said moving to medium-term budgeting had been recommended by the International Monetary Fund.

There is some flexibility in the plan.

Minister Chambers said: “We have built a contingency of a €1bn which is not allocated.”

But overspending by a Department will be taken from that Department’s spending the following year.

The Government had promised to publish the document in the summer and was criticised for delaying its release.

The Coalition’s repeated overspending beyond its commitments in the Budget has been highlighted by the Irish Fiscal Advisory Council.

The previous Fine Gael, Fianna Fáil and Green Party government abandoned a 5% spending limit following a surge in expenditure following Covid 19.

The Coalition’s spending for 2025 is already €4bn or 8% beyond its commitments made in October last year when the Budget was published.