While I am on my feet, I thank the ushers and all the staff here for the past couple of days. It has been a really busy few weeks here and I want to say a huge thank you to them all. It has been long hours on all of them and I want to use the opportunity to say that while I am here.
I thank all Deputies for their contributions. I have stayed here for two hours of them. The Cabinet Ministers have been very busy and there are a lot of meetings on today so I am more than happy to attend this debate on behalf of the Ministers for Public Expenditure and Reform and Finance.
I will make a couple of responses to some of the contributions that were made while I was here and then I will give my closing statement. Deputy Andrews spoke of the cost-of-living crisis. I agree wholeheartedly about what he said about sport and recreation. It is something the Minister of State, Deputy Chambers has been working on with significant investment in the area, recognising the significance of it for communities. I take his points about Debra Ireland too.
Deputy Shortall spoke about engagement. There is the Committee on Budgetary Oversight and Deputies engage in the briefings we receive, particularly in the run-up to the budget, and do so very positively on those and on the pre-budget submissions. There is ample engagement with Deputies and the Government on the budget. She made points about income inequality, something which the Government is attempting to address during its tenure.
Several Deputies spoke about emergency budgets. We have been clear about this. A €2.5 billion package has been put in place already, some of it targeted and some direct intervention. There were calls for an emergency budget followed by a motion of confidence in the Government. Opposition positions are not consistent on these things. Had the motion succeeded we would have entered into a serious period of uncertainty.
Deputy McGuinness made very valid points about the organisations he met with. However, he also made a very irresponsible point about climate change and addressing the climate challenge as some goal we believe in, referring to my own party. It is very unfortunate to say that in a week where half of Europe is on fire with rising temperatures. It is unfortunate he brought that in.
Deputy Martin Kenny spoke about regional investment.
I thank Deputy Bruton for his very useful intervention on enterprise success and what funds our economy. That is critically important. We are talking about taxation but it is the redistribution of tax income that is critically important. We need good enterprise success in this country to fund the social and environmental progress we all hope to achieve. He raised relevant points on shallow retrofits of homes and infrastructure. Deputy Bruton and I have spoken about this and the circular economy before. These are critically important.
I also thank Deputy Devlin who spoke about solar panels. Deputy Shanahan spoke about regional investment in the south east. I take on board the points made by Deputies Pringle, Browne and Higgins. I thank all Deputies for their contributions. It has been a useful debate and it is very much appreciated.
I echo much of what my colleagues the Ministers, Deputy Donohoe and McGrath, said in their opening remarks. The summer economic statement sets out a very significant budget package for next year in recognition of the changed economic landscape and, in particular, the cost-of-living challenge while also laying the groundwork to keep our public finances on a sustainable trajectory into the future. We are living in deeply uncertain times. Time and again we have been confronted with unprecedented challenges. Brexit reshaped our relationship with our closest trading partner. An historic pandemic caused economic turmoil on a massive scale and Russia's illegal and immoral invasion of Ukraine resulted in inflation at a level we have not seen in decades.
We did not foresee these events but we were prepared to address them. We were prepared because over many years we repaired the damage caused by the global financial crisis and carefully and gradually restored our public finances to a stable footing. This meant we could intervene to shield the economy from the most severe impacts of the pandemic and lay the foundation for a strong and broad-based economic recovery. Just months on from the lifting of public health restrictions, we have more people at work in Ireland today than ever before in our history.
We have continued to act to assist people with the cost-of-living burden. Between the pandemic and the response to inflation, we have made approximately €50 billion available over the past two and a half years. This has been necessary and justified, and the remarkable recovery we have seen in the labour market proves the Government made the right call.
We must recognise there are signs the global economy is slowing and the risks to our recovery are very much towards the downside. The summer economic statement outlines the Government’s intention to introduce a cost-of-living budget. A budget package of €6.7 billion is in place for next year. A package of this size demonstrates the Government’s commitment to assisting people with the cost-of-living issue while continuing to invest in our public services. This is a much larger package than was set out in the strategy published last year.
The sustainability of public expenditure requires that two criteria be satisfied: the level of core expenditure growth must be sustainable over the long term, and investment in expenditure must protect and deliver improvements in public services. The second of these criteria means our fiscal policy must be responsive to changes in the economic environment.
Core spending will now increase by 6.5% next year. This additional expenditure balances the need to protect core public services while ensuring budgetary policy does not become part of the inflation problem.
Government is also providing €4.5 billion in non-core expenditure for temporary measures. This expenditure will provide humanitarian support for refugees arriving from Ukraine as well as a more limited Covid provision for potential ongoing requirements.
The budget package reflects the changed economic environment at present. However, those of us in government also have a responsibility not to take short-term decisions that could ultimately jeopardise our future economic stability. That is why the Government has also restated its commitment to our medium-term fiscal strategy for the years beyond 2023, controlling current public expenditure at sustainable levels and rebuilding our fiscal resources. We will also ensure measures aimed at reducing cost-of-living pressures are carefully targeted so they do not add to inflation.
We are now projecting a very modest budget surplus for next year, but as has been highlighted previously, this is entirely a reflection of the rapid growth in corporation tax receipts. Were it not for these receipts, we would still be running very significant deficits. Corporation tax receipts, more than half of which come from just ten large companies, are not a sustainable basis for permanent spending commitments, as many Deputies mentioned this afternoon. We know from our own recent history that windfall tax revenues can suddenly disappear. A small headline surplus is a positive sign, but it does not paint the full picture.
The package for budget 2023 and the medium-term fiscal strategy set out in the summer economic statement recognise the changed economic environment and the need for Government to do more today, but they also reflect the reality that we cannot afford to continue to intervene on such a scale indefinitely, especially when much of the uplift in our tax revenue cannot be relied upon.
The Government has shown we can keep the public finances on a stable pathway. We have done so before. We have also shown over the past two and a half years that we will act when needed to support our economy and our citizens. The summer economic statement strikes the right balance.