Bernard Durkan (Kildare North, Fine Gael)
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189. To ask the Minister for Public Expenditure and Reform to set out the extent to which financial provision can be made for off-balance sheet funding of vital infrastructural projects that may be necessary, such as arterial drainage, flood relief, emergency housing or other vital and unforeseen issues meeting expenditure; if Government bonds may be a resolution in such circumstances; and if he will make a statement on the matter. [2355/16]

Brendan Howlin (Wexford, Labour)
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The key issue faced by the Government in seeking to deliver infrastructural projects continues to be the fiscal space available to Government under the fiscal rules of the Stability and Growth, which impacts on the Government's ability to increase expenditure, including on capital projects. Any funding that would be raised through the issuing of new Government Bonds, as suggested in the question, would not be off-balance sheet and therefore any such funding raised would have no impact on the fiscal space available to the Government, nor would it provide any additional capacity for further Exchequer expenditure without equivalent spending cuts in other areas or tax increases.

In terms of the ability to deliver additional public infrastructure on an off-balance sheet basis, in General Government terms, the scope to do so under Eurostat rules is constrained. Public Private Partnerships are the only recognised mechanism by which this can be done at present, and the Government has already agreed to a new €500 m third phase of the PPP programme which was announced in the Capital Plan. However, PPPs impose long term financial commitments over a very long period of time (up to 40 years), which increase over time as new PPPs come on stream thus absorbing an increasing amount of the Government's discretionary capital expenditure allocation on an annual basis. Accordingly, the use of PPPs must be carefully planned, and controlled, in a manner that is sustainable in the long term and which the public finances can afford.

The possibility of identifying other options to assist in delivering key public infrastructure on an off-balance sheet basis continues to be explored, in particular in the context of delivering on the commitments in the Government's Social Housing Strategy and the potential to use the €400 m earmarked for this purpose from the proceeds of the sale of Bord Gais Energy. However, identifying a suitable mechanism that is capable of meeting the Eurostat requirements for classification as off-balance sheet is proving challenging. The Government remains open to the possibility of using such off-balance sheet options, if suitable options can be identified, to supplement direct Exchequer investment and assist with the delivery of critical national infrastructure on a timely basis, provided that this can be done on a sustainable and affordable basis.

The Deputy will recognise that maintaining fiscal sustainability and economic stability under the Government's fiscal framework will ensure that Ireland retains the hard-won restored confidence of international financial markets to meet its ongoing funding needs. This is central to the continuance of Ireland's economic recovery, securing further reductions in unemployment, achieving further gains in living standards and ensuring the continued development of our public services.