Dáil Éireann Debate, Wednesday - 13 May 2020
129. Deputy Michael McGrath asked the Minister for Public Expenditure and Reform the change in the general government balance for 2020 as a result of the extra spending announced to deal with the Covid-19 outbreak; if the funding is coming out of existing resources; if a supplementary estimate will be required to be passed by Dáil Éireann; and if he will make a statement on the matter. [4432/20]
View answerThe Stability Programme Update (SPU), published last month, outlined overall expenditure of €78.4 billion for 2020, including €8 billion (across Health, Social Protection, and Business, Enterprise and Innovation) directly arising from the Covid-19 crisis. This represents a significant investment that will be partly funded through additional borrowing with a deficit of c. €23 billion projected for this year. This expenditure amount reflected Government decisions at that time in relation to:
- Social Protection measures – Illness Benefit, the Temporary Wage Subsidy Scheme (TWSS), and Pandemic Unemployment Payment (PUP);
- an amount was also included in respect of the estimated impact on income supports of the projections in relation to unemployment underpinning the fiscal scenario outlined in the SPU;
- Costs arising in the Health Sector;
- Exchequer funding to support business related liquidity measures.
There have been a number of developments in the period since publication of the SPU. On 2nd May, the Government adopted an additional suite of measures, targeted towards the business sector. The measures include liquidity supports (guaranteed loans and additional tax forbearance), additional investment funds (ISIF2 for medium- and larger-sized enterprises; establishment of an enterprise fund for micro- and small-sized enterprises) and the waiving of commercial rates for businesses forced to temporarily close due to restrictions. From a statistical classification perspective, not all of these measures are included in estimates of the general government balance – loan guarantees, for instance, are contingent liabilities rather than actual liabilities.
Given that the Revised Estimates for Public Services (REV) 2020, published on 18th December 2019, had not been voted before the dissolution of the Dáil there is scope to reflect the Covid-19 related measures that impact on voted expenditure in new Departmental Estimates for 2020 to be presented to Dáil Éireann.
Additional borrowing will be required to predominantly fund the introduction of these Covid-19 related measures this year.
