Bernard Durkan (Kildare North, Fine Gael)
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146. To ask the Minister for Public Expenditure and Reform the extent to which he remains satisfied that expenditure remains within the constraints laid down by the international community/banking sectors; and if he will make a statement on the matter. [22344/23]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Summer Economic Statement 2021 set out a fiscal framework which allows us to meet the key objectives set out in the Programme for Government: investing in our economy and society to deliver improvements in infrastructure and public services, while reducing the deficit in order to underpin the sustainability of the public finances as we emerge from the Covid-19 pandemic.

For core expenditure, the strategy set out overall core spending growing at around 5% per year on average over the period, a rate broadly in line with trend growth rate of the economy. This level of core spending increase, combined with unwinding the temporary Covid supports once no longer required, seeks to ensure that the level of spending and overall position of the public finances are sustainable over the medium term. The strategy of linking expenditure growth to the trend growth rate of the economy allows for counter-cyclical supports when required, and also, when revenue is buoyant, supports reductions in the General Government deficit.

However, our Expenditure Framework must be responsive to the economic and fiscal context. Developments in 2022 and 2023 have altered the economic landscape significantly, including higher inflation and borrowing costs. Price pressures due strong demand exiting the pandemic and supply side issues, which have been compounded by the war in Ukraine, have led to pressures on people and businesses.

To balance the immediate need to support households and our core public services against the longer term need to ensure sustainable public finances, a short term adjustment to the Expenditure Strategy was required. In finalising the fiscal and budgetary parameters for Budget 2023, we sought to strike a balance between helping to mitigate cost of living pressures and ensuring sustainability of the public finances. This looked to ensure budgetary policy complements the monetary approach by ensuring that tax and spending policies do not add to inflation.

The 2023 Government Expenditure Ceiling is set at €91.1 billion. This funding will support our core public services, provide investment in infrastructure under our National Development Plan and continue to provide non-core supports where needed. Budget 2023 provided for significant investment in our schools, healthcare provision, our childcare sector and our public sector workforce. This increased investment can be seen in the expenditure to date in 2023. The overall expenditure ceiling provides for €5.2 billion in non-core expenditure. This funding will provide continued support for temporary challenges, including the provision of humanitarian assistance for people arriving in Ireland seeking protection, cost of living supports and Brexit.

At end April, expenditure is line with the parameters set out in theRevised Estimates2023. Total gross voted expenditure amounted to €26.9 billion for the first four months of the year and this is €0.1 billion or 0.5 per cent below profile. Further information on expenditure trends can be found in the monthly Fiscal Monitorpublished on the Department of Finance website.

Last month the Minister for Finance and I published the draft Stability Program Update(SPU). This is an important point in the annual budgetary cycle and a reporting requirement to European Commission under EU Regulation 1175/11 or "six pack" of reforms. It sets out the state of play in the overall economy and allows us to take stock of the continued investment in our day-to-day public services and infrastructure. The macroeconomic figures demonstrate the continued resilience and strong performance of the Irish economy which has been supported by a responsive approach to fiscal policy as outlined above.