State spending in Ireland supports many small firms. These are firms that are so inefficient that they would face extinction in the absence of enormous state spending. Many, if not most, of these firms are low waged and non-unionised. Their conditions of work tend to be bad too.
This means that much of the surplus value generated by more efficient firms is transferred, through the imposition of taxation, from these firms to these less competitive ones. The outcome is less capital available by the more profitable firms for capital growth. This hinders the growth and concentration of industrial capital. It correspondingly constrains the growth and concentration of the industrial working class.
Not unconnected with this, state spending artificially maintains many of the villages, and even towns, in rural Ireland. In the absence of state spending many of theses villages and small towns would cease to exist.
In short state spending hinders class polarisation in the Irish republic. This hinders capital growth and concentration and the corresponding growth and concentration of the working class. This, in turn, hinders the politicisation of the working class.
The Irish state promotes backward capital and thereby artificially sustains a backward (petty) bourgeois class to the detriment of the working class and the class struggle. Consequently increased state spending cannot serve the class interests of the working class. Ironically much of the Irish Left promote spending by the capitalist state as the way forward.