Dáil Éireann Debate, Wednesday - 6 July 2016
42. Deputy Mick Wallace asked the Minister for Public Expenditure and Reform if he is satisfied with the current proposed ratio of two to one public investment to tax cuts as set out in the summer economic statement, or if he believes that spending the entire fiscal space for 2017 on public investment is a better option in the long run; and if he will make a statement on the matter. [19730/16]
View answerThe Summer Economic Statement (SES) recognises that economic and social progress go hand in hand. Only a strong economy supporting people at work can pay for the services needed to create a fair society. 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 SES estimates that there will be cumulative net fiscal space of €11.3 billion over the period 2017 to 2021 with a 2:1 ratio between increased spending on public services and tax reductions. For 2017, this results in the allocation of €0.67 billion of total net fiscal space of €1 billion to expenditure increases.
However, this is the total additional spending planned for 2017. Some increases are already included in the base expenditure for 2017 arising from certain demographic pressures in Health, Social Protection and Education, the carry forward of Budget 2016 measures and the Public Capital Plan. When added to the €0.67 billion fiscal space, the full increase in gross voted current expenditure is €1.3 billion (2.5%) between 2016 and 2017 with gross voted capital expenditure increasing by €0.4 billion (10.5%).
The Deputy may also wish to note that the allocation to expenditure increases in 2017 of €0.67 billion set out in the SES exceeds the totality of the fiscal space amounting to €0.5 billion identified for 2017 at the time of Budget 2016 in October last.
The Government's intention is that by setting out the broad parameters of economic and fiscal policy over the medium term, the SES will help frame discussions with the Oireachtas on budget priorities for 2017.
