Brendan Howlin (Wexford, Labour) | Oireachtas source

The economic crisis obviously had a profound impact on the public finances. Nobody in this House would deny that. The fiscal adjustment implemented in order that Ireland could successfully exit the troika programme and return sustainability to our public finances required expenditure reductions. Gross voted expenditure was reduced from its peak of just over €63 billion in 2009, when infamously we were told we were awash with money, to €54 billion last year. Consequently any international comparison of Government expenditure needs to be viewed in that context.

In implementing expenditure reductions, the Government's priority was to ensure that a targeted approach was adopted in order to protect key public services and social supports to the greatest extent possible. The key sectors of health, education and social protection were prioritised throughout this period, and this year these three areas of health, education and social protection account for some 80% of the Government's gross voted spending on the current side.

The fiscal forecasts in April's stability programme update outline that in 2016 general Government expenditure, excluding debt interest, is projected to be just 32% of GDP or 37.5% of GNP. As a proportion of the overall economy, this would leave Government spending next year at roughly the same size it was in 2001.

Budget 2015 marked a turning point in our fiscal and economic recovery, as expenditure reductions were no longer required to meet our fiscal targets. The Government was in a position to hold overall spending steady and to make some targeted increases in selected areas. The capital plan which I published this week involves an additional €27 billion of capital spending over the period 2016 to 2021.

In setting out expenditure measures for next year's budget, Government will seek to enhance further key public services while building on the progress we have made in returning our economy to stability.

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