Mick Wallace (Wexford, Independent)
Link to this: Individually | In context | Oireachtas source

174. To ask the Minister for Public Expenditure and Reform if he is satisfied with the level of investment in public services here, given our standing in relation to the rest of the European Union; and if he will make a statement on the matter. [2004/16]

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context | Oireachtas source

Comparison of investment in public services relative to the rest of the European Union needs to take into account the profound impact the economic crisis had on the public finances. The fiscal adjustment implemented in order that Ireland could successfully exit the troika programme and return sustainability to our public finances required significant expenditure reductions and tax increases. Gross voted expenditure was reduced from its peak of just over €63 billion in 2009 to €54 billion in 2014.

Budget 2015 marked a turning point in our fiscal and economic recovery, with expenditure reductions no longer being required to meet our fiscal targets. The Government was in a position to make some targeted increases in selected areas. Further, with the economy performing strongly and Exchequer tax receipts over €3 billion ahead of profile in 2015, additional funding was made available through Supplementary Estimates of €1.4 billion to support key services and social supports. This brought gross current expenditure in the key areas of Health, Social Protection and Education to over 81% of all gross current expenditure for 2015, reflecting the Government's priority to protect key public services and social supports.

As the Deputy is aware, the size of the State essentially refers to the resources it has available to it and the services it provides within those resources. My Department included some trend analysis on the size of the State over time in the 2014 Expenditure Report which is available on the Department's website. 

Data between 1983 and 2014 show that in real terms the State's expenditure tripled in size but as a proportion of the overall size of the economy, spend varied around a long term average of 30% of GDP.  This reflects changes in both the size of the economy and expenditure.

In making comparisons with the rest of the European Union, the Deputy will also be aware that the basis for the comparison can have a significant impact. Expenditure compared against GDP, GNP or a hybrid of the two may give different results. Adjusting for the demographic profile of the population can also impact on the comparisons.

Including the additional amounts provided by way of Supplementary Estimate, General Government Expenditure, excluding debt interest, is forecast for 2015 at just under 32% of GDP and 37½% of GNP. As a proportion of the overall economy, Government spending is roughly the same size it was in 2001 and is broadly in line with the trend over time.

Ireland is on track to exit the Excessive Deficit Procedure with a general government deficit close to 1½% of GDP for 2015. Budget 2016 was therefore framed under the rules that apply under the preventive arm of the Stability and Growth Pact. The Revised Estimates for Public Services ("REV") 2016 set out further sustainable increases in public expenditure. The increases provided in the REV demonstrate the Government's commitment to investment in public services and assisting those most in need while ensuring that the public finances are managed on a sustainable basis.

Specifically in relation to capital investment, the Capital Plan announced an exchequer capital spend of €27 billion over six years.  If we add investment from the wider semi-state sector, and off-balance sheet mechanisms such as PPPs, total state investment amounts to €42 billion over the period. 

The €27 billion Exchequer component of the Capital Plan, supplemented by the new €500 million phase of the PPP programme, is primarily targeted at addressing priority needs in transport, education, housing and health care. Investments will be made in public transport, including commencement of a metro project in Dublin, new and upgraded schools, Primary and continuing care health facilities, and social housing. Investments will also be made to mitigate risks from flooding. There will also be continued investment to support job creation.