Dáil Éireann Debate, Wednesday - 21 April 2021
68. Deputy Peadar Tóibín asked the Minister for Public Expenditure and Reform if austerity measures are being considered or discussed by his Department in response to the economic impact of Covid-19 lockdowns on the country. [20480/21]
View answerOver the course of 2020 and 2021, over €28 billion has been provided for additional expenditure to respond to Covid-19, with €12 billion of this amount included in the overall Government Expenditure Ceiling of €87.8 billion for 2021. This is a substantial additional allocation in addition to core public spending, and allows for measures to support our people, businesses and key public services.
The scale of the impact of the pandemic on the public finances has been stark, with a deficit of approximately €18 billion both last year and this year. However, the economic projections set out in the draft Stability Programme Update (SPU), which was published last week, offer grounds for hope that, as the vaccine rollout continues, the economy can recover strongly over the second half of this year.
The SPU 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.
Based on the projections in the SPU, a growing economy and sustainable growth in core expenditure, with a strong focus on value for money and effectiveness, and a National Development Plan to support social, economic and environmental progress can put the public finances on a more sustainable footing.
In the short-term, the priority is to continue to support workers and businesses impacted by the pandemic. In this regard, the Pandemic Unemployment Payment, Employment Wage Subsidy Scheme and Covid Restrictions Support Scheme have been extended to June. Further to this, the Government has also committed that there will be no cliff edge to these supports. We are conscious that continued support will be required to assist sectors of the economy on the path to recovery and we will set out these plans in the coming weeks.
