Enda Kenny (Mayo, Fine Gael) | Oireachtas source

Deputy Howlin was an esteemed member of a Government that had to make very difficult decisions about changing the direction of the country and bringing it back from an unprecedented recession. He asked two questions. There are five specific commitments in the programme for Government in respect of the economic opportunity that lies ahead. The first is to meet the domestic and EU fiscal rules and the summer statement sets out how that will happen. The nominal budget will be balanced in 2018. Second, there should be at least a split of 2:1 between spending and tax, and the projections are that this ratio is to be maintained each year. The third is that there would be a spend of at least an additional €6.75 billion in delivering additional public services by 2021, with current expenditure in that year projected to be 6.75% higher than 2016. The fourth commitment is an additional €4 billion in Exchequer capital investment up to 2021. We would comply with and exceed the latter by making use of the favourable treatment of capital in the rules so that capital will increase by just over €5 billion. The fifth commitment is the establishment of a rainy day fund. The Ministers responsible for both finance and public expenditure and reform have pointed out that €1 billion per year will go to the fund in the period 2019 to 2021, with a commitment to bring forward proposals to the Oireachtas for discussion on that. It would be a matter for the Government of the day as to whether that should continue beyond 2021 and how it should be used, depending on the circumstances that apply internationally or from an economic perspective.

The total amount available to the Government over the five years is estimated to be a cumulative €11.3 billion. Critically, the space for 2017 has increased to €1 billion, with €1.2 billion available in 2018. It means the Government can bring forward some spending for 2017 for the kind of issues mentioned by the Deputy, including infrastructure and social issues, that was not available even three months ago. From 2019 to 2021, the increase will be of the order of €3 billion per annum, arising after the balancing of the budget in 2018. This means the additional capital for 2017 will be €250 million, for 2018 it will be €750 million, for 2019 it will be €1.18 billion, for 2020 it will be €1.38 billion and for 2021 it will be €1.59 billion. That is a cumulative €5.14 billion over the period. This means that many of the priority issues which must be addressed can be brought forward somewhat, as there will be an additional €250 million available in 2017 that was not available in figures from just a few months ago.

Obviously, there is a space here and the Minister pointed out how the Irish Fiscal Advisory Council would be involved in discussions about the formation of a rainy day fund, how it might be used and what it would be used for and the opportunities to make proposals in that regard.

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