Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 24: To ask the Minister for Social Protection the size of the cuts she envisages will be made to her Department's budget each year to comply with the commitment to the EU and IMF to reduce social expenditure. [21322/11]

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 154: To ask the Minister for Social Protection the size of the cut she envisages will be made to her Department's budget each year to comply with the Government's commitment to the EU and IMF to reduce social expenditure. [21601/11]

Joan Burton (Dublin West, Labour)
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I propose to take Questions Nos. 24 and 154 together.

One of the core commitments in the Programme for Government is the restoration of fiscal stability. As we all know, overall Government spending in 2011 will be roughly €18 billion more than this year's overall Government income and that level of Exchequer borrowing is clearly not sustainable. In round terms, the total income that Government will get from tax and PRSI in 2011 is €42 billion. My Department is expected to spend over €20 billion or almost half of tax and PRSI income combined. For that reason, the transition to a more balanced budgetary position simply cannot be made without affecting social welfare spending. The funding agreement with the EU and IMF commits the Government to a further adjustment of "at least €3.6 bn" in Budget 2012, including a reduction in expenditure of €2.1 billion. The Department of Social Protection necessarily has a major contribution to make in achieving a more balanced budget, as it accounts for 39% of gross current voted expenditure, equivalent to 16% of GNP.

The depth of the economic downturn and the size of the exchequer borrowing requirement are such that there will be an on-going necessity to curtail overall expenditure in 2012 and in later years. The exact level of contribution that spending on social welfare will make to the overall reduction in expenditure will be decided by Government later this year, informed by the outcome of the Comprehensive Review of Expenditure that is currently underway in all Departments.

The objectives of the Review are to inform the best use of resources which will enable us to meet overall fiscal consolidation targets, re-align spending with Programme for Government priorities, target resources at the most effective programmes and set new objectives. This is necessary for many reasons, not least so that we can continue to make social welfare payments at appropriate levels, sustaining social cohesion and treating people with dignity.

I have also established an Advisory Group on Tax and Social Welfare which harnesses expert opinion and experience to address a number of specific issues around the operation and interaction of the tax and social protection systems. They will recommend cost-effective solutions as to how employment disincentives can be improved and better poverty outcomes achieved and identify the specific practical institutional and administrative improvements to their operation.

Any changes to the schemes and services provided by my department, including the levels of welfare payments, will be informed by the overall Government-wide options identified in the comprehensive review and by the findings of the Advisory Group