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

As I said earlier, the estimate of the emergency level of expenditure is approximately €15 billion. That amount comes on top of €15 billion to €16 billion in expenditure last year as well. In total, across last year and this year, expenditure in this regard has exceeded €30 billion. The expenditure of €15 billion this year, however, will reduce significantly next year as the economy recovers and as all sections of our economy will now be allowed to reopen fully and to trade in as normal a way as possible. Significant improvements are being seen in the number of people on the pandemic unemployment payment, PUP, for example. Some 106,000 now receive the payment compared with a peak of 602,000 people.

The intention is that the €15 billion being spent this year will transition to a figure of approximately half that figure next year. There will then be around €7 billion of direct, Covid-19-related, expenditure. We have constructed that expenditure in a way that enables us to have a contingency fund. As next year progresses, therefore, and as we continue to have to live with the virus and perhaps also to deal with other unpredictable events, contingency funds will be in place to enable us to respond as circumstances unfold. Of that envisaged €7 billion, some will be allocated directly to Votes and the budgets of Departments, particularly in healthcare. Costs related to Covid-19 will continue to occur in healthcare, such as in test and trace, vaccination etc. Similarly, Covid-19-related spending will also continue to be required in education to protect our staff, pupils and students and in other sections of Government and across the public services.

That is how we intend to structure spending. We will allocate a certain amount, which could be up to €2.5 billion, and there will also be a significant contingency reserve. Built into that will be a buffer that will consider employment performance. As members will be aware, the level of unemployment forecast across next year is just over 8%. It could work out better than that, which we sincerely hope it will, or it could end up being worse. Therefore, we must have sufficient headroom to be able to respond as circumstances unfold. On budget day, we will be announcing more specific changes to vital schemes, such as the employment wage subsidy scheme, EWSS. It has been extended for another month, as the committee will be aware, at the current rates and with no changes. The Minister for Finance, Deputy Donohoe, and I will set out on 12 October what the plan is for the wage subsidy scheme in the months ahead.