Written answers

Tuesday, 31 May 2016

Department of Public Expenditure and Reform

Public Expenditure Policy

Photo of Mick WallaceMick Wallace (Wexford, Independent)
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63. To ask the Minister for Public Expenditure and Reform if he has raised concerns with the Department of Finance regarding the tax cuts promised over the next five years; his views on the ratio of tax cuts to public investment promised in budget 2016, particularly given that Ireland has the third lowest level of public expenditure in the Eueopean Union; and if he will make a statement on the matter. [12598/16]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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As outlined in the Programme for Government, the Government is committed to boosting public expenditure in a sustainable way and will introduce budgets that will involve at least a 2:1 split between investment in public spending and tax reductions. This will allow expenditure to be increased to meet the additional costs arising from an ageing and growing population and to provide for targeted improvements in public services.

The Programme for Government recognises that economic and social progress go hand in hand. Only a strong economy supporting people at work can pay for the services needed to create a fair society. The Programme for Government, therefore, sets out a clear strategy for increasing spending in a sustainable way built on stable revenues. A key focus of the Government is on providing the best environment for job creation. Much progress has been made in recent years with significant growth in the numbers at work. Unemployment has fallen from a peak of over 15% to a seasonally adjusted unemployment rate for April this year of 7.9%. The Government's ambition is to help create 200,000 new jobs by 2020, including 135,000 outside of Dublin.

When comparing investment in public services relative to the rest of the European Union, account needs to be taken of the impact the economic crisis had on the public finances. In addition, 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 and, given Ireland's relatively young population, adjusting for the demographic profile of the population can also impact on the comparisons.

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