Dáil Éireann debate -
Wednesday, 24 May 2000

Vol. 519 No. 6

Written Answers. - Current Expenditure.

Derek McDowell

Question:

132 Mr. McDowell asked the Minister for Finance the financial implications of the Programme for Prosperity and Fairness for the period 2000 to 2002; and the adjustments, if any, made to the estimates and projections for revenues and expenditure under the current budget, as set out in Table 1 of the budget 2000 statistics and tables. [14618/00]

Minister for Finance (Mr. McCreevy)

In 2000, the Programme for prosperity and fairness entails estimated additional current expenditure of £163 million which includes £121 million in additional pay costs. The cumulative additional pay costs in each of the years 2001 and 2002 will be £590 million and £970 million respectively.

Apart from the additional pay costs, during the course of the programme the Government will introduce progressively social inclusion measures with a total gross cost in the year 2003 of £1.5 billion. This £1.5 billion includes the cost of indexing social welfare payments in line with the CPI. However, these indexation costs are included already in the underlying no policy change projections for 2001 – 2002 given in Table 1 of the 2000 Budget Statistics and Tables. The additional gross social inclusion expenditure above no-policy-change levels is estimated at £1.2 billion approximately. In addition to the gross additional social inclusion expenditure as indicated, the terms of the programme involve other expenditure commitments over the period 2001-2003. These additional costs are difficult to quantify but best estimates suggest they may be of the order of £400 million on a full year basis by 2003.

The programme also provides that tax reductions over the period of the programme, up to and including budget 2003, when taken together with pay increases, will provide for increases in net take home pay of up to 25% or more.

The year by year implementation of these tax reductions and of the expenditure increases will be decided in the context of the budgets for those years in light of the prevailing economic conditions.