Written answers

Thursday, 23 September 2021

Department of Public Expenditure and Reform

Budget 2022

Photo of Jackie CahillJackie Cahill (Tipperary, Fianna Fail)
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69. To ask the Minister for Public Expenditure and Reform the key elements in his expenditure management and spending strategy for Budget 2022; and if he will make a statement on the matter. [45683/21]

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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Budget 2022 will be framed in the context of:

- continued sustainable increases in core public expenditure with a further significant increase in capital investment;

- provision of exceptional additional funding for temporary supports to address the impacts of Covid-19;

- addressing the impacts of Brexit, in particular through measures to be funded by the Brexit Adjustment Reserve to counter the adverse consequences of the withdrawal of the UK from the EU.

The Summer Economic Statement (SES) laid out up to €8.1 billion in 2022 for non-core, temporary spending under the overall expenditure ceiling of €88.2 billion and a core expenditure ceiling of €80.1 billion. The core expenditure ceiling includes additional core expenditure of €4.2 billion over the 2021 core amount and includes an increase of €1.1 billion, almost 12%, in additional capital funding.

The core current expenditure increase of €3.1 billion proposed for Budget 2022 will provide for existing level of service (ELS) costs and allow for the implementation of new policy measures to enhance public services and social supports. In total, a provision of €2.1 billion is reflected as being earmarked for ELS costs, leaving €1 billion for new measures.

In relation to non-recurring temporary supports, this allocation is targeted at addressing the specific challenges of Covid-19, with up to €7 billion available to fund relevant measures, including under the National Recovery and Resilience Plan, with certain of this amount to be held back in a contingency reserve to allow Government respond to the situation with the virus next year. This funding will allow for the phased withdrawal of supports, additional expenditure on income supports as the labour market continues to recover, and for spending on necessary public health measures required for the delivery of public services in a Covid environment.

Decisions on specific measures to be covered by this funding and allocations to Departments will be made as part of the Estimates process. As in 2021, it is intended that all expenditure allocations related to Covid-19 will be separately identified in the Expenditure Report to ensure transparency.

Further to this, Ireland has been allocated €1.1 billion under the EU’s Brexit Adjustment Reserve, to fund measures to address the negative impacts of Brexit across the eligible period of the fund. This funding will be allocated across Budget 2022 and Budget 2023 to support employment, businesses and local communities negatively affected by Brexit, including those in the fishing industry.

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