Dáil Éireann Debate, Wednesday - 21 April 2021
66. Deputy James Lawless asked the Minister for Public Expenditure and Reform the details of Ireland’s capital expenditure as a proportion of GNI* in 2021; the way this compares to the EU average; and if he will make a statement on the matter. [20400/21]
View answerThere are two primary measures for public capital expenditure.
The first is public Gross Fixed Capital Formation (GFCF). This is the measurement which is generally used for making international comparisons of public capital investment. This is a broad measure of public capital investment in the sense that it includes central and local government expenditure.
The second measurement is Gross Voted Capital Expenditure. This is the figure for capital expenditure by government departments and agencies, which is voted by the Dáil on an annual basis. This is Exchequer expenditure, i.e. it comes from the Exchequer Account, into which all Government receipts are paid and from which all Government expenditure is funded, unless provided otherwise by law. Unlike GFCF, Gross Voted Capital Expenditure does include items such as capital grants. For government accounting, Gross Voted Capital Expenditure is typically the figure referenced for public investment as it relates directly to the budgetary decisions made by the Government.
Based on the most recent projections published by the Department of Finance in the Stability Programme Update, Gross Voted Capital Expenditure in 2021 is projected to be 4.7 percent as a share of GNI*, while public GFCF is projected to reach 5.1 percent as a share of GNI*. This elevated level of investment reflects the fact that public capital investment has increased from €6 billion in 2018 to €10.1 billion in 2021, the highest level in the history of the state.
In terms of international comparisons, the latest available data from Eurostat relates to 2019. In that year public GFCF in Ireland stood at 3.8 percent as a share of GNI*, above The Netherlands which was 3.4 percent of GDP, Denmark which was 3.2 percent of GDP and the EU27 Average which was 3.0 percent of GDP.
A fundamental question for the review of the NDP is whether the total level of public investment through capital expenditure needs to be adjusted. This issue is being considered in detail by my Department and is referenced in the Phase 1 Report of the NDP review which was recently published and can be found on my Department’s website at gov.ie/2040.
