Michael McGrath (Cork South Central, Fianna Fail)
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427. To ask the Minister for Public Expenditure and Reform if the €1.2-€1.5billion of fiscal space identified for 2016 takes account of the commitments for public sector pay increases agreed under the Lansdowne Road agreement or if the actual scope for announcements on budget day is reduced by the costs of these commitments; and if he will make a statement on the matter. [31547/15]

Michael McGrath (Cork South Central, Fianna Fail)
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428. To ask the Minister for Public Expenditure and Reform the extent to which the €1.2 billion to €1.5 billion of fiscal space identified for 2016 is constrained by expenditure commitments already entered into; and if he will make a statement on the matter. [31549/15]

Brendan Howlin (Wexford, Labour)
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I propose to take Questions Nos. 427 and 428 together.

The Spring Economic Statement (SES) and the corresponding Stability Programme Update (SPU) outlined that fiscal space of the order of €1.2 to €1.5 billion is expected to be available for Budget 2016 split evenly between expenditure increases and tax reductions.

This would allow Government to target an increase in government expenditure of between €600m and €750m in 2016 relative to the 2015 spend and provides the scope to manage any additional impact of previous Budgets, deal with underlying demographic and spending pressures, and target enhancements in key public services.

In addition, as outlined in the SES, the range of €1.2 to €1.5 billion does not take into account re-allocation within expenditure funded by savings from efficiencies and policy measures. For example, Live Register savings over and above those related to the cycle due to lower unemployment as a result of existing activation measures will be available to fund new measures.

The increases in the expenditure ceilings between 2015 and 2016, set out in Comprehensive Expenditure Report 2015-2017, already reflect certain expenditure needs including demographics in Health, Education and Social Protection.

Specifically in relation to the Lansdowne Road Agreement, the available fiscal space will be partly utilised to deal with the costs related to that agreement which, as previously stated, begins the process of unwinding the financial emergency measures in aprudent and sustainable fashion, thereby reducing the risk to sustainability of the public finances.