Brendan Howlin (Wexford, Labour) | Oireachtas source

Consistent with the requirements of the Stability and Growth Pact, SGP, the pace of economic growth and greater than forecasted tax receipts this year have allowed the Government to allocate, on a prudent basis, additional amounts to expenditure in priority areas.

The Revised Estimates volume 2015 set out total gross voted expenditure for the year of €53.231 million. This level of expenditure was based on the assumption of coming in below the excessive deficit procedure deficit target of 2.9% and the level of revenue forecast at the time of budget 2015 in mid-October 2014. As detailed in the Expenditure Report 2016, published on budget day last month, the gross voted expenditure forecast outturn for 2015 was revised to €54.875 million, with the Government expenditure ceiling changed to reflect this adjustment.

This extra funding of over €1.6 billion for gross voted expenditure this year has allowed the Government to target additional expenditure in areas experiencing increased demand and pressures. Importantly, with Ireland moving to the preventive arm of the Stability and Growth Pact from next year, this additional 2015 expenditure has been fully taken into account when assessing compliance with the Stability and Growth Pact obligations. While at this stage the definitive amounts in respect of the Supplementary Estimates have yet to be finally determined by all Departments, it is expected that the aggregate amount will be consistent with the additional amount included in the forecast outturn that we set on budget day.

The general government deficit target for 2015 under the excessive deficit procedure is 2.9% of GDP. Budget 2015 set a deficit target of 2.7%, but based on the forecasts published on budget day, the new deficit we have set for this year is revised down to 2.1%.

The backdrop to additional spending this year is 2015 tax revenues exceeding forecast by over €2 billion, delivering a deficit of 2.1% of GDP, and the significant expenditure reductions required since 2009 to return sustainability to the public finances. Therefore, the additional expenditure represents a responsible approach towards ensuring that public services are adequately funded to meet social and economic objectives, both this year and next year.

See this speech in context