Bernard Durkan (Kildare North, Fine Gael)
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38. To ask the Minister for Public Expenditure and Reform if in the context of public expenditure and reform he is of the view there is a need for a shift in emphasis in view of the extent to which the economy has increasingly become dependent on corporate taxes while encouraging continued foreign direct investment; and if he will make a statement on the matter. [2345/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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Sound and sustainable public finances are essential to support growth in the economy. In recent years, Government spending has been managed in a sustainable and prudent manner with public expenditure growing at a lower rate than growth in the economy overall. Steady, incremental progress in public expenditure, and the intensification of reform and innovation across the public service, will continue to support delivery of our social and economic priorities. In particular, public expenditure has a key role to play in safeguarding economic growth through efficient and effective public capital investment.

The Spending Review 2017 took place during the first half of last year and was the first in a series of rolling, selective reviews which will cover the totality of Government spending over a three year period to 2019. The results of the first year of this new approach were published with the Mid-Year Expenditure Report 2017 and included key sectoral trend analysis and a number of individual topic papers. Building on the output of the 2017 Spending Review, the intention is that the Spending Review in 2018 will further reinforce the more structured and systematic means of analysing spending focusing on an assessment of efficiency, effectiveness and sustainability.

Investment in public infrastructure is essential to support balanced regional growth and to increase the capacity of the economy over the long-run. Following the review of the Capital Plan in 2017, on Budget day last year I announced an additional allocation for capital investment of €4.3 billion over the next four years, up to the end of our existing Capital Plan in 2021.  This will allow our State and its agencies to properly plan major infrastructure projects over the medium term while also ensuring communities and businesses can plan ahead.

Turning to Corporation Tax, as the Deputy will be aware, the Department of Finance published its Annual Taxation Report last week. This Report provides details of the role this tax head plays in the overall composition of Exchequer tax revenues.

In relation to Foreign Direct Investment (FDI), Ireland is one of the most globalised nations in the world and Foreign Direct Investment has been a key contributor to economic development and growth. Regarding this, our competitive corporation tax regime has been an important part of our industrial policy since the 1950s. However, there are many criteria on which companies base the location of their activity, of which taxation is just one.  Factors such as availability of physical and technological infrastructure, availability of skilled staff, the level and scale of technological innovation, the regulatory environment and political stability are also significant considerations. 

An effective education system supports economic growth.  This year €10 billion has been allocated to the Education sector. This investment is important not alone in supporting inward investment but also nurturing indigenous businesses and fostering innovation.