Written answers

Thursday, 24 November 2016

Department of Public Expenditure and Reform

Public Expenditure Policy

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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38. To ask the Minister for Public Expenditure and Reform the flexibility his department is reviewing in terms of the fiscal rules and public capital investment. [36574/16]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy will be aware, there are specific flexibility provisions within the fiscal rules for public capital investment.  In specific terms, the Expenditure Benchmark pillar of the fiscal rules allows favourable treatment for capital investment through the smoothing of capital formation increases over four years. This means that only one quarter of an annual increase in capital investment must be funded in the first year from within the fiscal space, which allows for the front loading of capital formation increases.   

This flexibility has been utilised by the Government to prioritise funding for capital investment. The results of this prioritisation are shown in Tables 4 and 6 of the Expenditure Report 2017, which detail the Exchequer capital ceilings for 2016 to 2019. These tables illustrate that the allocation for public capital investment will grow from around €4.2 billion in 2016 to over €6 billion in 2019, a 46% increase in public capital investment in just three years.    

The Capital Plan published in 2015 outlines the framework and broad direction for investment priorities. As set out in the Expenditure Report 2017, there will be a review of the Capital Plan beginning immediately with the aim of presenting a revised programme of capital investment in the first half of next year. In setting out proposed allocations for each Department in 2018 and 2019, the review will take into account, commitments already contained in the Action Plan for Housing and Homelessness.  

Flexibility within the fiscal rules for growth enhancing capital investment will ensure sustainable increases in capital funding, which will help to achieve our social objectives while maintaining the health and sustainability of the public finances.

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