Bernard Durkan (Kildare North, Fine Gael)
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111. To ask the Minister for Public Expenditure and Reform the extent to which he remains satisfied that realistic steps in terms of public expenditure and reform are being taken to facilitate economic progress and prudent fiscal management; and if he will make a statement on the matter. [48271/22]

Bernard Durkan (Kildare North, Fine Gael)
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256. To ask the Minister for Public Expenditure and Reform the extent to which his Department can remain satisfied that public expenditure as announced in budget 2023 remains in accord with best practice; and if he will make a statement on the matter. [48662/22]

Michael McGrath (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 111 and 256 together.

In Budget 2023 I have set out a responsive approach to fiscal policy - investing in the future of our public services and economy while addressing the challenges faced today. I have provided €85.9 billion in core expenditure. This funding will support the sustainable delivery of public services and infrastructure, and invest in the quality of life in Ireland to support a strong, fair and equal society into the future. This expenditure will ensure investment in our public sector workforce, improvements in our public services and investment in digitalisation and climate initiatives.

In addition I have outlined non-core expenditure of €4.5 billion which will provide for the continued support of the economy and society for the external challenges we face. Economic activity rebounded strongly as society reopened following the abatement of the Covid-19 pandemic. However, new challenges have emerged. The cost of living is increasing for many households. The war in Ukraine has meant the provision of significant humanitarian supports. Non-core allocations provide for measures in respect of a continued response to: Covid-19; Ukraine; and Brexit. This approach ensures resources can be provided on a temporary basis to respond to these challenges and then unwound when no longer required.

The Government’s aim is to deliver sustainable public expenditure, and Budget 2023 seeks to balance the need to protect the real value of public services and support citizens without adding further to inflationary pressures.

Sustainable expenditure over the medium-term will be delivered through a Medium Term Expenditure Framework (MTEF) which provides for:

- Setting the core expenditure growth rate at sustainable levels; and

- Providing ongoing improvements in public services.

This Framework must be responsive to the economic and fiscal context. This year has seen developments which have altered the economic landscape significantly, including higher inflation and borrowing costs. Taking account of these developments, a temporary upward adjustment is being made to the MTEF. This sees 2023 core expenditure increasing to €85.9 billion, with a core expenditure growth rate of 6.3 per cent. Core expenditure growth is expected to return to 5 per cent over the medium term.

Through this approach I am seeking to ensure the right balance between providing support, investing in our economy and public services, and safeguarding fiscal sustainability in the long term.

John Lahart (Dublin South West, Fianna Fail)
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112. To ask the Minister for Public Expenditure and Reform if he has set aside a contingency fund for further one-off spending measures in 2023; and if he will make a statement on the matter. [48230/22]

Michael McGrath (Cork South Central, Fianna Fail)
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Budget 2023 set a comprehensive response to support investment in public services, facilitate continued response to externally driven challenges alongside measures to help alleviate the cost of living pressures experienced by households and businesses.

Cost of Living

The Government announced a €2.2 billion Winter cost of living package for households. This includes:

- a double week of weekly social welfare schemes in October,

- a fuel allowance lump sum of €400,

- a once-off payment of €500 to those in receipt of Carer's Support Grant and to people on Disability Allowance, Blind Pension & Invalidity Pension,

- a €200 living alone allowance lump sum,

- a €500 working family payment lump sum,

- a double child benefit payment,

- a once off reduction in the student contribution fee by €1,000 for undergrads and 1/3 for Apprentices; €1,000 increase to post-graduates tuition fee contribution grant.

- a double payments to those eligible for SUSI maintenance grants and once off payment of €500 for SFI and IRC PhD researchers,

- €8 million for the Student Assistance fund, and

- three €200 electricity credits with the two instalments in the New Year.

In addition, a Christmas Bonus will also be paid to social protection recipients in the same manner as last year. While the supports provided are substantial, Government cannot protect all households and businesses against the full effects of inflation as the level of resources available are finite, and to do so would lead to additional inflationary pressures. However, the measures introduced do recognise the particular challenges faced by those on lower and fixed incomes.

In recognition of the unprecedented rise in energy bills being experienced across the economy, Government is also making available €340 million in 2022 to support other sectors / services across the economy. This will support schools, further and higher education institutions, health funded bodies, local authorities, and provide funding for areas including Cultural Institutions and Bodies, Arts, Gaeltacht, Sports Bodies & Community Organisations.

In relation to businesses, Government is introducing a €200 million Ukraine Emergency Response Scheme to be administered by the Department of Enterprise, Trade and Employment. This scheme will provide funding to help firms faced with liquidity shortages as a result of increased energy costs. An estimated €1.2 billion will be provided under the Business Energy Support Scheme.

In terms of Budget 2023, income tax measures alongside a range of permanent expenditure measures will also help households with the increasing cost of living. These measures include a €1 billion Social Protection package, reductions in childcare costs through increased National Childcare subsidy and a number of health-related measures.

Non Core Expenditure 2023

A series of successive external shocks are having an impact on our society, economy and fiscal position. Our fiscal policy has remained responsive by providing supports through non-core expenditure. Since 2020, the effects of Covid-19, Brexit and the war in Ukraine have posed considerable challenges. These have been challenging events, and our response to them has required substantial financial resources. We have been able to confront these challenges due to a strong economy and fiscal position, and a willingness to invest in sustaining and growing our economy into the future.

Allocations of temporary funding to respond to external challenges facing our economy and society are considered separately from core expenditure allocations. This approach facilitates responsive fiscal policy providing supports to deal with key emerging issues while protecting core day-to-day expenditure and investment. This ensures focus on long term goals such as enhancing investment in infrastructure and public services.

Given the expected continued impact of Covid-19, Brexit and the war in Ukraine into 2023, funding will be provided for our response to these challenges. I have provided for €4.5 billion in non-core expenditure in 2023. I have allocated over €1.8 billion of this funding to Departments as part of Budget 2023, while €2.7 billion will remain held in reserve to allow Government to respond to these challenges as required.