Bernard Durkan (Kildare North, Fine Gael)
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200. To ask the Minister for Public Expenditure and Reform if he remains satisfied that targets in respect of savings and public expenditure reform will continue to be met in the context of economic recovery; if he has identified particular areas of conflict in this regard; if he remains satisfied that economic recovery and retention of public expenditure objectives are not mutually exclusive; and if he will make a statement on the matter. [18190/15]

Brendan Howlin (Wexford, Labour)
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Between 2009 and 2014, gross voted expenditure was reduced from a peak of just over €63 billion to €54 billion. In implementing expenditure reductions the Government was conscious of the need to balance the requirement to return the public finances to stability with creating the conditions necessary for sustained economic growth and job creation.

In Budget 2015, the Government was in a position to implement targeted increases in expenditure while at the same time achieving the fiscal target of a general government deficit below 3% of GDP required to ensure our successful exit from the Excessive Deficit Procedure.

The intervening period since Budget 2015 has seen the economic recovery continue to broaden out, with domestic demand increasingly contributing to economic growth. As outlined in the Spring Economic Statement (SES) a number of key economic and fiscal variables have been revised, with the combined effect of these changes lowering our forecast deficit in 2015 to 2.3%.

The SES has outlined fiscal space of between €1.2 billion to €1.5 billion for 2016, of which €600 million to €750 million will be directed towards expenditure increases . This will allow demographic pressures in key areas to be addressed and allow for new measures to further enhance public services.

As the economy continues to recover we will look to build upon the significant and wide-ranging public service reforms implemented over recent years. These have added efficiency and effectiveness to the way in which our public services are delivered and will continue to play a key role in supporting the rebalancing of the public finances and releasing further funds for reinvestment in key public services in a manner consistent with continuing to meet our EU obligations.

I will be publishing a new Capital investment programme next month will set out, for the period to 2020, the capital envelope to support continued economic growth and job creation.