Barry Cowen (Offaly, Fianna Fail)
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64. To ask the Minister for Public Expenditure and Reform if there is a spending overrun for 2018 (details supplied); if so, the precise impact the spending overrun will have on the fiscal position for budget 2019 and the funds available for allocation in 2019; the implications on the €800 million available for allocation in budget 2019 if the overspend in the Department of Health was to persist for the entire year; and if he will make a statement on the matter. [38090/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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Managing the delivery of public services within budgetary allocations is a key responsibility of every Department and Minister. My Department is in regular contact with all other Departments and Offices to ensure that expenditure is being managed within the overall fiscal parameters. The drawdown of funds from the Exchequer is reported on each month against expenditure profiles in the Fiscal Monitor published by the Department of Finance. As outlined in the Fiscal Monitor, at the end of August, overall gross voted expenditure of €39.4 billion was €152 million (0.4 per cent) behind profile but up by 7.9 per cent in year-on-year terms, with a key element of the year-on-year increase being expenditure in the Health sector.

The Mid-Year Expenditure Report outlined a risk in relation to the continuation of the trend in health expenditure given that while at the end of June health expenditure was just 2 per cent above profile, the year-on-year increase was almost 9½ per cent. As expenditure in the subsequent two months has continued broadly in line with the run rate in the first half of the year, health expenditure at the end of August is €0.3 billion or 3 per cent above profile, indicating a requirement for a significant Supplementary Estimate. Work is ongoing to determine the scale of such a Supplementary Estimate and its potential impact on aggregate voted expenditure in both 2018 and 2019.

Given the priority placed on achieving the fiscal targets for 2018 and 2019 outlined in the Summer Economic Statement, a key consideration is the impact of such additional expenditure in the health sector on the overall fiscal position. Any increase in expenditure in one sector, unless offset by expenditure underspends elsewhere, either voted or non-voted, or additional revenues, would result in a deterioration in the general government deficit from a projected 0.2 per cent of GDP this year and 0.1 per cent of GDP next year. Looking to Budget 2019, the Summer Economic Statement indicated the importance of fiscal policy targeting an improvement in the headline position. As such, all voted expenditure developments will need to be considered along with a range of other revenue and expenditure moving parts across General Government in the context of the overall fiscal arithmetic to be updated for October’s budget.