Bernard Durkan (Kildare North, Fine Gael)
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57. To ask the Minister for Finance the extent to which he expects incomes in the public and private sectors to grow over the next five years; and if he will make a statement on the matter. [41092/15]

Michael Noonan (Limerick City, Fine Gael)
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In line with the projected pickup in economic activity over the medium term horizon, improvements in income are expected.

In relation to labour income, projections underpinning Budget 2016 indicate that on a whole-economy basis average wage rates are expected to grow by an average of 2.5 per cent per annum over the period to 2020. This increase is driven by positive contributions from both average hourly wages as well as the number of hours worked. Furthermore, employment volumes are also expected to rise in line with a strengthening of labour market conditions. As a result, the whole-economy total pay bill (i.e. incorporating total employment gains and increases in earnings per worker) is projected to grow by an average of approximately 4.5 per cent per annum over the medium term horizon.

Broad-based increases in income are expected, with positive contributions from both the public and private sectors. The public pay bill is projected to grow at over the medium-term horizon. This outlook incorporates provisions for the Lansdowne Road Agreement for the years to 2018.

In addition to labour income, the current medium term outlook for profit income remains positive. As is typical in a cyclical upturn, profit income, which includes self-employed profits, has lead wage growth. Profit income is also set to continue to record robust growth over the medium term. This is primarily driven by a pickup in domestic trading profits.

Increases in income are, of course, contingent upon achieving sustainable economic growth in the years ahead. This, in turn, is predicated on inter-alia continued gains in competitiveness and ensuring sustainable public finances.