Dáil debates

Thursday, 19 November 2015

Ceisteanna - Questions - Priority Questions

Government Expenditure

9:30 am

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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1. To ask the Minister for Public Expenditure and Reform the total Supplementary Estimates that are now expected to be introduced for 2015; how this breaks down across individual Departments; if additional expenditure is required because of inadequate expenditure provision at the start; and if he will make a statement on the matter. [40741/15]

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I wish to ask the Minister for Public Expenditure and Reform the total Supplementary Estimates that are now expected to be introduced - there is reference to 13 of them, without any figures attached so far, on today's Order Paper - how this breaks down across individual Departments, if additional expenditure is required because of inadequate expenditure provision at the start of the year, and if the Minister will make a statement on the matter.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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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.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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Essentially, the answer the Minister has given and his opening sentence, in straightforward English, is, "We have it so we will spend it". That is precisely what he has said here today. "We have it so we will spend it," is the new mantra from Deputy Howlin in the run-up to the general election. I indicated in previous debates the extra €7.3 billion the Minister is pumping into the Exchequer over the past 13 months, between last year's Supplementary Estimates, this year's Supplementary Estimates, and the extra funding in budget 2015 that he did not expect a month before the 2015 budget, to try and win the next election. The Minister concluded by saying that they have extra revenue so they can spend it.

I am surprised that this Government has not learnt any lesson from the past. Some might be critical of that policy on previous occasions, but after what we have been through, for this Government to come in here today and say, "We have it so we will spend it" is reckless and shows the Government has learnt nothing.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The Deputy, as usual, is completely wrong. The deficit we set for this year was a demanding deficit to reach the target of below 3% of GDP. When we framed the budget for 2015 in October of last year, it provided for a deficit of 2.9%. In the spring, we reduced that to have an even tighter deficit of 2.7%. The actual outturn, including the additional expenditure that I have outlined, will be a deficit of 2.1%. Nobody in their wildest imaginations four years ago would have thought that by the end of 2015 we would have a deficit of 2.1% of GDP. In fact, we are outperforming other much more developed economies that have not gone through the economic crisis that we have had. It is absolutely prudent to keep a tight focus on reducing the deficit to 2.1% but at the same time to respond to pressures in our economy to provide decent funding levels to health and other areas, such as education, that the Deputy would demand in normal circumstances.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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The Minister published expenditure ceilings this time last year for a three-year period and he blew them out of the water on budget day. We were told they were sacrosanct. He has now increased them by €1.6 billion. He has increased the expenditure ceilings by a quick announcement on budget day.

The Minister states he had an extra €2.2 billion in tax revenue and that almost €2 billion of it will go on additional expenditure. The logic is that if one of the big multinationals had thrown in an extra €1 billion or €2 billion in corporation tax this year, the Minister would have spent most of that also, and still maintain the deficit, on increasing underline, base expenditure for this year and next year going forward. The Minister is making the capital mistake of increasing baseline expenditure on the basis of once-off tax receipts that were received this year that he knows he cannot guarantee will happen in subsequent years, and he is back to the mantra, "We have it so we will spend it". If that is the way Deputy Howlin wants to win the election, that is his call.

I note the Minister has not given us the figure for the 13 Supplementary Estimates even though they are published on the Order Paper. Health, Social Protection and Environment, Community and Local Government are not in the list. I will bet, at this stage, that the Minister knows but is refusing to tell us because I asked him for the figures by Department and he has not given them.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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It is interesting to note that the Fianna Fáil official position is against additional expenditure this year, which runs counter to all its Private Members' and special notice questions baloney.

They are against any relief or any further expenditure that we have set out such as the winter initiative, ensuring the fair deal is provided within a two-week scenario or ensuring the summer works scheme is funded to allow deficiencies in the built environment of our schools to be addressed. Fianna Fáil is against the provision of these, even though we are more than meeting the stringent targets we set ourselves in terms of our deficit. We have a recovering economy and more people at work. This is a sustainable income stream because, as the Tánaiste indicated to the House yesterday, just below 2 million are at work. The Fianna Fáil position is, like the European Commission, that every cent of that additional revenue should be used to retire debt and, therefore, our deficit should be eliminated entirely rather than give some relief to people under pressure. I reject that view.