Gerald Nash (Louth, Labour)
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32. To ask the Minister for Public Expenditure and Reform if he has held discussions with the Minister for Finance with regard to the need to raise additional revenue to fund permanent current expenditure increases given his intention that Government borrowing would only be for capital investment purposes by 2023 as stated in his recent updates to the Cabinet on Expenditure Management and Spending Strategy for Budget 2022 (details supplied); and if he will make a statement on the matter. [45497/21]

Michael McGrath (Cork South Central, Fianna Fail)
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As outlined in the Summer Economic Statement (SES), anchoring core expenditure growth to an appropriate trend growth rate for the economy of c. 5% per annum, along with a phased unwinding of the exceptional Covid-19 expenditure, can provide a pathway back to a more sustainable budgetary position, while also providing the necessary resources to enhance our public services, social supports and infrastructure.

In line with the expenditure strategy laid out in the SES the expenditure ceiling for 2022 will be €88.2 billion, €80.1 billion of which will be for core expenditure. This amounts to a €4.2 billion or 5.5% increase in core expenditure, comprising €3.1 billion in current expenditure and €1.1 billion or almost 12% in capital expenditure.

Further to this a provision of up to €7 billion has been made for temporary spending measures to address the impacts of Covid-19 next year. In addition, funding for eligible measures as part of Ireland’s €1.1 billion allocation under the Brexit Adjustment Reserve is available to be allocated across Budget 2022 and Budget 2023.

The fiscal strategy set out in the SES will ensure that we reduce the deficit in an orderly manner to the point that we are only borrowing for capital investment purposes by 2023. Achieving this target is essential both to support society and the economy to recover from the impact of Covid-19 and to return our public finances to a sustainable position. Such sustainability in our public finances will ensure that we are in a position to address key priorities for our people in housing, health, education and climate action, while also placing us in a position to respond to future challenges.