Dáil Éireann Debate, Wednesday - 6 July 2016
41. Deputy Pearse Doherty asked the Minister for Public Expenditure and Reform his plans to deal with capacity pressures within the public sector in the context of the Government's announced tax cut programme. [19752/16]
View answerThe Government recognises that economic and social progress go hand in hand. Therefore, the Programme for a Partnership Government sets out a clear strategy for increasing spending in a sustainable way built on stable revenues. A key focus of the Government is on providing the best environment for job creation. Unemployment has fallen from a peak of over 15% to 7.8% in May this year. The Government's ambition is to help create 200,000 new jobs by 2020, including 135,000 outside of Dublin.
The Summer Economic Statement (SES) estimates that there will be cumulative net fiscal space of €11.3 billion over the period 2017 to 2021. The distribution of fiscal space is consistent with commitments in the Programme for a Partnership Government including:
- At least a 2:1 split between public spending increases and tax reductions.
- To increase the level of current expenditure from its 2016 base level by at least €6.75 billion by 2021.
- To deliver an additional €4.0 billion in cumulative capital expenditure over the period 2017 to 2021. In fact €5.1 billion will be delivered.
- To provide for a rainy day fund. It is proposed to contribute €1 billion per annum to a rainy day fund from 2019 onwards.
Delivering public services needs people and as regards staffing, in both the 2015 and 2016 Budgets, provision was made for significant additional staff in the Health Sector; more teachers, Special Need Assistants and Resource teachers in the Education sector; and additional Gardaí. Overall staffing levels increased by some 7,000 (2.3%) in the Public Service in 2015 and is projected to rise by a further 8,600 (2.8%) this year.
During this time, as the Deputy will be aware, the moratorium on recruitment has been replaced with delegated arrangements which give Departments greater flexibility in managing staffing resources, including recruitment and promotion. Central to the arrangements are Departments staying within pay bill ceilings. We will of course continue to grow our public services over the medium term but the delegated arrangements will ensure that we do so at affordable and sustainable levels.
Investment in public infrastructure is vital for the medium and long-term competitiveness of the economy as well as for underpinning social cohesion through provision of vital services to the public. The public capital plan published last September set out an exchequer spend of €27 billion on capital investment over six years. Under the Plan key investments will be made in transport, education, health and enterprise. In every part of the country, these investments will boost our competitiveness, create jobs, and upgrade our social infrastructure. If we add investment from the wider semi-state sector, and off-balance sheet mechanisms such as PPPs, total state investment amounts to €42 billion over the period. The SES sets out total extra spending on capital investment of €5.1 billion over the period of the plan, an increase of 18.5% on the previously proposed Exchequer component of the plan. The allocation of this additional funding will be determined as part of the mid-term review of the Capital Plan in 2017 and will take account of key emerging priorities.
