Paschal Donohoe (Dublin Central, Fine Gael)
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At the core of our fiscal policy is the Medium-Term Expenditure Strategy (MTES). The Strategy serves two fundamental objectives: to ensure the long-term sustainability of core expenditure growth and to safeguard investments in public services. This framework undergoes annual review as part of the budgetary process, particularly in the Summer Economic Statement, and prior to the Budget.

Of course managing the delivery of public services within budgetary allocations is a key responsibility of each Minister and their Department officials once allocations have been agreed at the Revised Estimates Volume stage of the budgetary process. My Department plays a central role in monitoring overall expenditure in line with Government objectives and agreed fiscal policy and my officials engage with all Departments to monitor expenditure.

The Revised Estimates for Public Services 2024 outlined a Government expenditure ceiling of €96.7 billion and allocated funding accordingly (increasing to €97.1 billion in the Stability Programme Update to take account of the Public Service Pay deal).

Expenditure profiles for 2024 were completed by all Votes and submitted to my Department. Performance against these profiles is used in-year to monitor the expenditure position. At end Q1 2024, expenditure is €22.8 billion which is in line with profile. However, year-on-year growth is up by over 2.9 billion (14.9%) with a number of expenditure risks emerging in specific areas. A proactive approach must be taken by all line Ministries in order to stay within their agreed allocation. Full details are set out in the monthly Fiscal Monitor published on the Department of Finance website.

My Department stays in regular communication with all Departments to ensure expenditure is managed within overall fiscal parameters and there are a number of processes and procedures that support this including:

1. Drawdowns from the Exchequer are monitored against published profiles.2. Key data and information in relation to voted expenditure is published monthly in the Fiscal Monitor.3. Quarterly reporting to Government by the main spending Departments on their respective sectors also takes place alongside the overall expenditure management updates provided by my Department.4. Regular engagement, through a number of fora, between spending Departments and my Department at senior official level.

Regular communication between myself and the Minister for Finance also ensures we remain vigilant and respond effectively and promptly to any emerging challenges that might put pressures on individual Votes or Departments. This includes continuous monitoring of the macroeconomic situation such as labour market trends, inflation levels as well as monthly tax and expenditure monitoring.