Paul Murphy (Dublin South West, Anti-Austerity Alliance)
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18. To ask the Minister for Public Expenditure and Reform his views on the public spending to GDP rate; his further views on whether it is sufficient to deliver quality public services; and if he will make a statement on the matter. [30841/16]

Paschal Donohoe (Dublin Central, Fine Gael)
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There is a substantial increase of €1.9bn in Gross Voted Expenditure in the Estimates for 2017.  This represents an increase of almost 3.5 per cent.  As well as including €0.9bn for various expenditure pre-commitments such as demographic related expenditure pressures and the Lansdowne Road Agreement, there was €1bn allocated for additional measures. These measures include:- additional staffing in Health, Justice and Education;- progressing the Action Plan for Housing in 2017; and - the introduction of a new single Affordable Childcare Scheme and a number of increases to Social Welfare rates. 

While in technical terms, Ireland's General Government Expenditure as a percentage of GDP is projected to decrease - from an estimated 28.3% in 2016 to 27.8% in 2017 - a number of significant factors need to be taken into account in assessing this trend.

The recent revisions to Ireland's GDP level for 2015 published by the CSO highlight that the ratio set out above must be interpreted with very significant caution.  I would draw the Deputy's attention to the recent report of the Dáil Committee on Budgetary Oversight - which highlighted the limitations in key macroeconomic variables to accurately reflect developments in the economy in light of the scale of these revisions.  Indeed, the Department of Finance warn in Budget 2017 documentation using inflated national accounts figures as a basis for future policy commitments.  

Furthermore, given Ireland's relatively young population, adjusting for the demographic profile of the population also impacts on comparisons with other European countries.This is illustrated on page 14 of the Mid-Year Expenditure Report which shows adjusted public expenditure in Ireland 2014 (as a % of GNI) being above the EU average when account is taken of defence and age-related expenditure.

Finally, account should also be taken of the severity of Ireland's public finance crisis relative to that in most other EU countries.

Budget 2017 marks the third year in succession that gross voted expenditure has been increased. The focus over the coming years must continue to be on moderate, sustainable increases.  In this fiscal context, the ongoing review and evaluation of existing programmes and expenditure, rather than targeting a certain expenditure to GDP ratio, can better support effective delivery of public services.