Mick Wallace (Wexford, Independent)
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33. To ask the Minister for Public Expenditure and Reform his views on the discrepancy in investment in public services between Ireland and other EU countries; his further views on the ratio of public investment to tax cuts in the recent budget, particularly in view of Ireland's ever narrowing tax base; and if he will make a statement on the matter. [30761/16]

Paschal Donohoe (Dublin Central, Fine Gael)
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Budget 2017 introduced a package of measures which will increase gross voted expenditure by €1.9bn in 2017 to a total of €58 billion.   As outlined by the Minister of Finance in his Statement to the House on Budget 2017, this is consistent with an expenditure to tax ratio of greater than 3:1 in favour of investment in public services. This exceeds the commitment in the Programme for a Partnership Government in which the Government committed to a split of at least 2:1 and reflects the Government's commitment to rebuilding and investing in public services.

Despite the significant increase in gross voted expenditure outlined above for 2017, Ireland's General Government Expenditure as a percentage of GDP is projected to decrease from 28.3% in 2016 to 27.8% in 2017. It is therefore important when comparing spending in public services relative to the rest of the European Union to take account of the basis for the comparison as this can have a significant impact. The Deputy will appreciate that the recent revisions to Ireland's GDP level published by the CSO highlight that the ratio set out above must be interpreted with very significant caution taking account of the exceptional factors impacting on the measurement of GDP for Ireland. Indeed, the Department of Finance has included an alternate analysis in the Budget 2017 documentation warning against using this inflated figure as a basis for future policy commitments. Furthermore, given Ireland's relatively young population, adjusting for the demographic profile of the population can also impact on the 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.

In Budget 2017, for the third consecutive year, the Government was in a position to allocate significant additional resources to public spending with a €1.9bn increase in Gross Voted Expenditure compared to 2016. As well as including €0.9bn for various expenditure pre-commitments such as demographic related costs and the Lansdowne Road Agreement, there was €1bn allocated for additional measures including: additional staffing in Health, Justice and Education; progressing the Action Plan for Housing in 2017; the introduction of a new single Affordable Childcare Scheme; and a number of increases to Social Welfare rates.