Michael McGrath (Cork South Central, Fianna Fail)
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311. To ask the Minister for Public Expenditure and Reform the amount of the €750 million of fiscal space identified for 2016 that will be used up by public sector pay commitments relating to the Lansdowne Road agreement; and if he will make a statement on the matter. [34735/15]

Brendan Howlin (Wexford, Labour)
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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 of expenditure funded by savings from efficiencies and policy measures.

In the context of public service pay, the Financial Emergency Measures in the Public Interest (FEMPI)  legislation under which public service pay reductions were effected is predicated on the presence of an extreme financial emergency in the State. Accordingly, as the fiscal emergency conditions abate, it is necessary to begin the prudent and gradual unwinding of the measures provided under the legislation in line with the improved fiscal position and our international commitments under the Stability and Growth Pact. Failure to do so could compromise the legal basis on which the legislation is based. Notwithstanding the current proposals for ameliorating the impact of the measures implemented under the FEMPI legislation, the legislation will continue to play a significant part in the management and control of public expenditure in the coming years.  

The estimated additional cost to the public service paybill in 2016 of the proposed changes to the legislation to implement the Lansdowne Road Agreement is €267m, inclusive of previously committed costs of €18m attributable to the Haddington Road Agreement.

The Lansdowne Road Agreement was not just about restoration of pay. It also secures the enhanced efficiencies and productivity measures which have been delivered by the Public Service Agreements, and underpins the ongoing public service reform programme to ensure the continued provision of more efficient and effective public services into the future.