Mick Wallace (Wexford, Independent)
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32. To ask the Minister for Public Expenditure and Reform if he has read the Nevin Institute's Summer 2015 Quarterly Economic Observer, which predicts that Ireland will have one of the lowest, if not the lowest, government expenditures in the EU by 2019; if he is satisfied that the promised 50:50 ratio of tax cuts to public services investment is the most effective use of public expenditure in order to help those on low and middle incomes; and if he will make a statement on the matter. [26394/15]

Brendan Howlin (Wexford, Labour)
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The Spring Economic Statement (SES) outlined that fiscal space of the order of €1.2 to €1.5 billion is expected to be available for Budget 2016. The fiscal projections contained in the SES and the Stability Programme Update (SPU) are based on a technical assumption of a budgetary package of €1.2 billion in 2016, split evenly between additional expenditure increases and reducing the tax burden on low and middle income earners.

The fiscal forecasts in the SPU outline that in 2016, General Government Expenditure, excluding debt interest, is projected to be just under 32% of GDP and 37½% of GNP.  As a proportion of the overall economy, Government spending in 2016 will be roughly the same size it was in 2001. 

Post 2016, the fiscal forecasts included in the SES and the SPU, and all related general government expenditure amounts and ratios, reflect a no-policy-change scenario from an expenditure perspective, other than provision being made for a €300 million increase in gross voted expenditure per annum to offset demographic pressures.

The production of fiscal forecasts reflecting policy beyond 2016 requires specific decisions on the allocation of fiscal space for each year.  Once there is visibility as to the exact quantum of fiscal space available each year, policy decisions will be required at Budget time on the allocation of the space between expenditure and tax measures.  Such decisions will take account of the prevailing economic conditions and Government's commitments to investing in public infrastructure and services. As these resource allocation decisions are made by Government, the ratios in relation to general government expenditure, and their comparison with other EU Member States, will adjust accordingly.