Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

The positive position in relation to the recovery of the Irish economy underpins the summer economic statement, SES, strategy. We are seeing a significant rebound in the economy and we expect that to transition towards a sustainable recovery over time. Our key focus is to help people who want to get back to work. We still have more than 200,000 people on the pandemic unemployment payment. These people lost their jobs simply because of Covid. That will remain a key focus of Government.

On the expenditure side, the need to gradually and carefully unwind the emergency Covid-related spending over time will be critical to bringing the public finances to a more sustainable position. The Covid spend this year is of the order of €15 billion, as an estimate at the mid-point of the year. The provision we are making for next year is of the order of €7 billion. The assumptions underpinning that are that we will make continued progress in the battle against this virus, that the vaccination programme, which is already proving highly successful, will continue to be so and that the situation will progressively improve. The unwinding of the expenditure is directly linked to the Department of Social Protection and conditions in the labour market. It relates to the number of businesses that have to depend on the employment wage subsidy scheme and the number of individuals and families depending on the pandemic unemployment payment, for example.

Covid aside, our key focus on the expenditure side is, first, to protect existing levels of service and make sure they are properly funded into the future. I believe we have made adequate provision for that on issues such as demographics, public service pay and the full-year costs of commitments made this year and in prior years. That is an important starting point. Then the focus is on having adequate headroom to support the recovery through the continuation of supports where we deem it appropriate. Then, critically, it is about prioritising the public capital investment programme. The figures set out in the SES show that this is where Government is focusing the most significant increases in public expenditure, with our capital envelope for next year rising to more than €11.1 billion. Four years ago in 2017, that figure was €4.6. It has been increasing very significantly since and will increase significantly next year and in the years beyond. That is to drive recovery, assist with job creation and tackle what we can all accept are the big challenges facing society. Undoubtedly, those include the need to tackle the housing crisis and get back to building in a more significant way. Public housing, affordable housing, cost rental and purchase will be the cornerstones of the Housing for All strategy, and the review of the national development plan.