Oireachtas Joint and Select Committees

Wednesday, 16 January 2019

Committee on Budgetary Oversight

Fiscal Assessment Report: Minister for Public Expenditure and Reform

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Deputy made a number of points. I am not sure where the questions were in his comments but I will respond to his points. He also made an assertion earlier that I had not responded to a number of questions that were put to me. That is not the case. However, any Deputy who is unhappy with an answer I have given has the option of putting another question to me or to ask the question again, which I will answer.

Regarding the overall point made by the Deputy, I will give him another set of figures in that regard, notwithstanding the fact that I have made it clear that I acknowledge the views published by the IFAC and will seek to take them on board for 2019. The other figures are, as I said in my opening statement, that between 2014 and 2019 gross voted expenditure increased by 23% in comparison to the period the Deputy refers to when the comparable figure was 63%. He asked what I am doing differently from what was done previously. The answer is a rate of current and capital expenditure growth that is significantly below what happened in the past.

The fact that in each of my budgets the criticism from some has been that the change in take-home pay has been only €5 a week for many people shows that I have been careful not to put in place taxation policies that could contribute to an overheating of the economy on top of the income growth that is taking place. The Deputy asked what is different in the current position from the period to which he is referring. The two significant measures that are different, and which I put in place, are a significantly lower rate of expenditure growth and taxation packages which in all cases are below the cost of indexing our tax code and which many have argued are not adding to individuals' take-home pay. One of the reasons I have taken that approach is that I am aware of the risk of tax packages that move in the cycle of economic growth. It is the type of approach that happened in the past and it is one I am not maintaining.

More broadly, in my many years of dealing with this issue and with this committee, I have never yet heard a charge from a Deputy that I am spending too much. That charge has not been levelled at me. I have never had an appearance before this committee where the mainstream charge has been that the rate of total Government expenditure is too high. The charge I always face is the need to spend more. The Deputy's party in recent months has been calling on me to spend more than €3.4 billion more. As I am privileged to hold this office, the responsibility ultimately lies with me in terms of the decisions that are made. What is different from the past are rates of expenditure that are significantly lower and income tax and social welfare packages that are considerably lower because the higher rates in the past ultimately proved to be unaffordable.

The Deputy makes the further point that if there are warnings, we should take them on board. I aim to do that. I have outlined what we are going to do this year, particularly in health. I also point to other things that were in place by the end of last year such as establishing the rainy day fund and the fact that we finished last year in surplus as opposed to having a deficit. The Deputy made a point that is incorrect, although he was repeating a charge that has been made by others. It is the assertion that at various stages I said I was going to move to a surplus in a budget in which I was involved. I have never done that. At each point I have said I will reduce our deficit, and in each budget we have over-delivered on our target. I have never said in a budget I have delivered that we will move to a surplus in that year and then missed that commitment. That has not happened.