Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

In making my first Estimates Statement to the Dáil, I am aware that my responsibility differs from that of my predecessor in his first year in office. In 2011, the then Minister for Public Expenditure and Reform, Deputy Brendan Howlin, was faced with announcing a very significant reduction in spending for 2012. Making decisions during this time of crisis was tough but toughest of all were the circumstances facing communities and families during the era of a bailout programme, a banking crisis, a surge in joblessness and forced emigration from our country.

Due to these choices, I am now in a position to continue, into 2017, the process of reinvestment in our country's future that began in 2014. The expenditure Estimates I am presenting this afternoon represent increases in current spending of almost €4 billion since we reversed the downward spiral in spending in 2014. This recovery in current spending has been achieved alongside remarkable growth in investment in our economic and social infrastructure of 26% since 2014. Thanks to the sacrifices of the Irish people, we are back on the pathway to a dynamic economy and a just and fair society.

Fairness is, of course, about the relative distribution of income in society, but it is also about improving services for our people and treating all members of our communities well. It is also about investment in education and improving our health services. It is about opportunities to work in a good job, to run your own business if you choose to, and to live in a good home and in a safe community while caring for your family, whatever shape that family may take. The opportunity for a sustainable, prosperous future must not be squandered by reckless spending or investing poorly. The decisions announced today are firmly rooted in that sense of responsibility.

Strengthening Ireland and improving people's lives

The spending priorities I am now setting out are the starting point of the delivery of our ambition for this country and its people. These announcements represent a staging post in the first of at least three budgets. They will continue to strengthen our economy and society to meet the challenges we face and to benefit from the opportunities we create. The €58 billion I am announcing today is made up of, first, €53.5 billion in current, day-to-day spending, equivalent to almost €11,500 for every man, woman and child in the country, and, then, €4.5 billion in capital spending to deliver the ongoing programme of investment in the Government’s capital plan. In total, this is an increase of €1.9 billion, or 3.3%, on the expected outturn in 2016. This is at a time when the economy is forecasted to grow by over 4.5% in nominal terms.

The allocation of these very substantial resources in the Estimates underpins key public services impacting on almost every aspect of our lives. They not only strengthen and support our economy, they strengthen and support our society. The proposed additional recruitment of close to 4,500 additional front-line staff, such as nurses, gardaí and teachers, is a clear demonstration of the Government’s commitment to ensuring that increased spending translates into real improvements in people’s lives.

Sustainable spending

Economic growth and the increased availability of resources for more spending was, prior to our crisis, taken for granted. The costs of that approach seared our State. Sustainable spending simply means a Government prioritising what we can afford among the actions that contribute most to strengthening our economy and creating a fairer society. The litmus test of that approach is that the increased spending that will take place in 2017 is affordable in that year, in 2018 and beyond. The unsustainable spending increase of today is the savage, socially destructive spending cut of tomorrow. I, therefore, make no apology for anchoring today’s spending decisions on three key pillars: spending we are confident we can afford now and into the future; making progress to a fairer society; and protecting our economy, particularly on account of the uncertainty caused by Brexit.

Spending review in 2017

Just as every household in the country needs to balance what goes out with what comes in, we in government need to work within what is financially feasible. After all, this is not our money; it is the public’s money. The budgetary landscape has undoubted improved significantly, reflecting the careful stewardship of the finances of our country. However, the many competing priorities and demands for resources reinforce the compelling need for more effective and more efficient public spending.

As Minister, I have consistently reiterated the need to consider the totality of spending when examining budget priorities.

Spending reviews previously played an important role in our efforts to reverse unsustainable expenditure growth. The purpose of future reviews will be to ensure that all expenditure is examined when the Government is deciding on its spending priorities. Better information and stronger evaluations should guide and inform these decisions. I am today announcing that a comprehensive spending review will be carried out in advance of budget 2018.

Honouring our commitments

The decisions I am outlining today are born of the programme for a partnership Government, agreed with my Independent colleagues earlier this year. Many believed that the Government would not still be in place by the time budget day arrived, and yet here we are.

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