Oireachtas Joint and Select Committees

Thursday, 15 July 2021

Committee on Budgetary Oversight

Summer Economic Statement: Minister for Finance and Minister for Public Expenditure and Reform

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

I thank the Deputy for those questions. Looking ahead to Covid-related expenditure in 2022, we made provision in the stability programme update which we published in April for expenditure of €4 billion. Some €2.5 billion is for different Departments since there will be continued costs in health, for example, for the vaccination programme, continued costs in education for the remainder of the academic year, and continued supports in areas such as public transport. We also provided €1.5 billion for what we call automatic stabilisers. In effect, it is for the provision of income supports for people who may continue to need to rely on the State for income if they are not in a position to return to work. We are going further than that in the summer economic statement and providing a further €2.8 billion as a contingency, which we can use for income supports, to meet costs that arise in Departments and to address any risks that will emerge in the labour market with the number people returning work. We have made steady progress in tackling this virus, notwithstanding the risk of the Delta variant. The vaccination programme is proving to be highly effective. In the next weeks, the level of coverage will be very high indeed across the eligible adult population. We believe that will enable us to fulfil the commitments that we have made and that, all going well, the assumptions will prove to be correct. There are always risks with a global pandemic and none of us can be certain. What we have set out in the summer economic statement represents our best judgment.

Regarding balanced regional development, I reiterate the points that I made to Deputy Canney earlier. There are significant opportunities in the revised national development plan, which we will bring forward shortly. It is a key priority for Government. There will be opportunities for further investment in health, education, transport and housing outside our cities. Under Project Ireland 2040, we expect the bulk of the growth to be outside Dublin over the period to 2040.

On the capital envelope, the figures that we set out in the summer economic statement represent the overall capital figures for each year. Total capital next year will be €11.1 billion, rising to €11.9 billion, then €12.8 billion in 2024, eventually hitting €13.6 billion. Decisions will have to be made within that about how much we allocate to each Department. Each Department will have to set its own priorities in the national development plan review in a manner consistent with the programme for Government. The Minister, Deputy Donohoe, might wish to address the fiscal rules.

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