Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

I propose to take Questions Nos. 73 and 88 together.

For 2023, the total allocation for the Defence group is €1.174 billion, comprising €893 million for Vote 36, Defence, and €281 million for Vote 35, Army pensions. This is an overall increase of €67 million on 2022 and double the increase last year. The allocation reflects the commitment of the Government to providing a financial platform for the defence sector to initiate the transformation of the Defence Forces, as recommended by the Commission on the Defence Forces. It also brings our defence capabilities closer to European norms and ensures the Defence Forces maintain their ongoing capacity to deliver on all roles assigned by the Government, both at home and overseas.

The Commission on the Defence Forces reinforced the urgent requirement for significant capital investment on defensive equipment programmes and upgrading and modernising the Defence Forces' built infrastructure. The capital allocation has increased by €35 million for next year to €176 million, which is a 25% increase in one year. This allocation represents the single biggest annual capital investment ever provided for defence. Many of the military equipment projects are complex, multi-annual and have long lead-in times. The additional funding now provided will further enable the Department and the Defence Forces to plan, prioritise and deliver on scheduled projects over the coming years. In particular, it allows my Department to progress its consideration of the development of a primary radar capability and the procurement of additional force protection equipment. A significant number of building projects will also advance under the Defence Forces built infrastructure programme, which will modernise and upgrade defence built infrastructure over the coming months. I referred to the capital investment plan of more than €70 million over the next few years for Haulbowline naval base, which is part of that.

The allocation for current expenditure in the Defence Vote has increased by €22 million to €717 million, made of up €175 million to meet standing and operational costs and €542 million for the ongoing pay and allowances of the Defence Forces, civilian employees and departmental civil servants, including the costs associated with the existing Building Momentum pay deal. The allocation includes funding to facilitate further recruitment to the Permanent Defence Force, in line with the recommendations of the commission. Funding is also provided to facilitate implementation of a number of key recommendations of the commission, such as specific enhancements to pay and allowances and the recruitment of a head of transformation and head of strategic HR in the Defence Forces, as outlined in the high-level action plan.

The allocation for Vote 35, Army pensions, has increased by €10 million to €281 million and will meet the pensions costs for more than 13,000 ex-members of the Defence Forces and their dependants.

The €67 million increase in the allocation does not fully describe the increases in defence spending next year. If, as expected, the new pay deal is accepted by unions, it will mean another €47 million on top of the €67 million spent on defence next year. That will give an increase in the overall spend on defence of approximately €114 million in one year, which is more than a 10% increase. By any standards, people would have to accept this as a very significant signal of intent that the Government is serious about implementing the commission's recommendations and, I hope, continuing to increase defence budgets year on year right up to 2028.

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