Seán Ó Fearghaíl (Kildare South, Fianna Fail)
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61. To ask the Minister for Public Expenditure and Reform if new rules are coming into effect in 2016 regarding Supplementary Estimates for ministerial Vote groups; if supplementary estimates will no longer be allowed; and if so, the action that will be taken in the event of budget overruns, and the way they will be rectified. [36788/15]

Brendan Howlin (Wexford, Labour)
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Ireland is due to exit the corrective arm of the Stability and Growth Pact  (SGP) at the end of this year and will transition to the preventive arm, which will set the context for our fiscal targets from 2016 onwards.  The core of the new arrangements is the Medium Term (budgetary) Objective (MTO), which is essentially a fiscal target for Member States of the European Union to achieve.  For Ireland, the MTO is to achieve a balanced budget in structural terms: this means a balanced budget once allowances are made for once-off temporary factors and the impact of the economic cycle on the public finances.  It will involve improving the structural deficit at a rate greater than 0.5% of GDP each year until the MTO is met. 

Along with this balanced budget requirement, compliance with the Expenditure Benchmark is another important pillar of the Fiscal Rules.  This is a complementary requirement under the reformed SGP.  It assists Member States to maintain or reach their MTO by explicitly setting the rate at which aggregate public expenditure can grow, unless funded by the introduction of discretionary revenue measures.  The Expenditure Benchmark is designed to regulate the growth in public expenditure in line with the medium term potential growth rate of the economy, thereby making sure that the level of spending is sustainable and can continue to be supported by the economy. 

From 2016 onwards, it will therefore only be possible to increase overall General Government expenditure in accordance with the requirements of the preventive arm of the SGP. The Ministerial Expenditure Ceilings for 2016 have been set in that context and it will fall to Departments to deliver services within these ceilings. From 2016, this means that additional resources in excess of those ceilings may only be allocated in a manner that is consistent with our obligations under the preventive arm of the SGP. Consequently, supplementary estimates in 2016 may not be met by additional revenue arising from the economic cycle but rather would need to be met through expenditure savings and efficiencies elsewhere or via discretionary revenue measures.