Dáil Éireann Debate, Wednesday - 21 April 2021
63. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the degree to which he remains satisfied that the action taken by his Department to date remains sufficient to protect Ireland from the double impact of Brexit and Covid-19; if he has contemplated or is contemplating any further exercises in this regard; and if he will make a statement on the matter. [2786/21]
View answerAs the Deputy correctly identifies, the past year has seen the policy landscape dominated by the double impact of Covid and Brexit, their impact on society and the economy, as well as the consequences this has had for public expenditure.
As part of Budget 2021, core current expenditure will grow by €3.8 billion, or just over just over 6%, compared to the allocation in 2020. This increase is primarily driven by an additional €1.9 billion for the Health sector to address capacity issues and enable our Health service better meet the needs of our citizens during the pandemic and beyond.
Outside of core expenditure commitments, there are a number of supports relating to the Covid-19 response that are reflected in Departmental Estimates. These costs amount to €6.5 billion and include €3.2 billion in Social Protection payments and €1.9 billion to support the Health service response to Covid-19.
There is also over €5 billion in Contingency funding which we have set aside to meet further expenditure requirements as they arise. By the end of this year my Department estimates that we will have made provision for over €28 billion in direct Covid related expenditure over and 2020 and 2021.
As a result of these measures, a general Government deficit of €18.4 billion, or 5% of GDP is estimated for 2020 – a €20 billion swing from 2019. A deficit of a similar size is expected again in 2021.
As a Government we are committed to restoring the public finances to a sustainable trajectory and ensuring that Ireland does not become an outlier as we emerge from the pandemic period.
The SPU, published last week, was prepared using certain technical assumptions in relation to expenditure. These assumptions included an annual average increase in core expenditure of almost 3½% per annum over the period 2022 and 2025 and an unwinding of the Covid-19 related expenditure.
On this technical basis, the SPU outlines that there is a credible path towards a sustainable budgetary position, with the phased unwinding of the temporary Covid-19 related expenditure supporting the better alignment of revenue and expenditure by the mid-part of the decade.
The Summer Economic Statement will offer the opportunity to present a more informed strategic view of the public finances. By that stage the vaccination programme will have advanced significantly, the impacts of the UK’s departure from the single market will be better understood, and the full effect of Covid-19 on the public finances will be more complete.
