Brian Cowen (Laois-Offaly, Fianna Fail)

Estimated end year total gross spending by Departments was approximately €45.1 billion in 2005, an increase of €3.9 billion or 9.5% over 2004. The end year outturn for gross spending by Departments was €225 million less than the original 2005 estimate adjusted to take account of certain Health Service Executive spending.

The increase in spending in 2005 over 2004 represented the costs of very significant improvements in public expenditure and I will mention just a few of these. The social welfare budget day package I announced in December 2004 cost in excess of €800 million, for instance, old age pensioners got an increase of €12 per week from January 2005. There was additional and better services in the education sector, where spending increased by €570 million or 9%, additional and better services in the health sector where the increase in spending was in excess of €1 billion and additional spending on ODA which went up by 15% over 2004.

These and other significant improvements in public expenditure are pitched across the spectrum of public services. I am satisfied that this was an appropriate increase. Equally, I am satisfied that the additional €1.4 billion being allocated to social welfare spending in 2006, the additional €1.3 billion in health spending and additional spending in many other areas is warranted and that it is appropriate for the Government to share the fruits of growth by reinvesting in the social and economic needs of the country.

As to variations in any given period between spending costs and outturns, these are nothing new. Estimates produced at any time for gross expenditure are dependent on the level of factors, such as take-up on demand-led schemes and the timing of bills received by suppliers and contractors. In addition, the level of receipts, which are reflected in net expenditure, cannot be predicted with certainty as they can be affected by timing of payments submitted by employers for PRSI and health contributions. Similar timing issues affect many other headings, such as European receipts. The simple fact is that if payments are received earlier than expected and if payments are delayed or demand for schemes lower than anticipated or if receipts are higher, this results in lower spending. The relevant Ministers will be able to give the details for each Vote to the Deputy.

Turning to the 2005 Exchequer balance, this showed an outturn deficit of €499 million compared to an original budget day target deficit of €2,988 million. This improved outturn was partly driven by lower than expected expenditure but was primarily due to higher than anticipated tax receipts during the year. Tax revenues for 2005 were €1.75 billion above the level targeted on budget day 2005. The improvement was due to a number of factors, including Revenue Commissioners special investigations, buoyancy in the property market, strong employment growth and the strong performance of the economy in general. I am sure the Deputy would agree that this positive budgetary performance is a welcome development.

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