Dáil Éireann Debate, Thursday - 16 June 2022
140. Deputy Ged Nash asked the Minister for Public Expenditure and Reform if he will review the current 5% spending rule given the cost-of-living crisis; if he agrees that efforts to support households through the crisis combined with the existing Programme for Government’s current spending commitments may see the 5% rule breached; and if he will make a statement on the matter. [31013/22]
View answerRecent months have seen a number of new challenges emerge across the economy. These challenges surfaced due to increased demand and supply chain issues as we emerged from the pandemic and have been compounded by the impact of conflict in Ukraine. As previously acknowledged, the Government cannot absorb the full spectrum of inflationary pressures. However, we have taken action to put in place targeted supports to assist households and businesses.
In recognition of the exceptional challenges facing the economy since the onset of the pandemic, provision for contingency funding has been put in place separate to core expenditure. This has enabled the Government to put in place these supports for businesses and households throughout the pandemic and to respond to the recent cost of living pressures.
The Summer Economic Statement 2021 set out a medium term expenditure strategy for core expenditure. This strategy aims to align core expenditure growth with the trend growth rate of the economy. It seeks to maintain fiscal policy on a sustainable path while continuing to invest in our public services and infrastructure.
I am currently engaged in preparations for this year's Summer Economic Statement with my colleague the Minister for Finance. The economic context has changed considerably with inflation levels elevated above those projected in Budget 2022. This adds complexity to the formulation of our fiscal strategy for 2023. In finalising the budgetary parameters, we will seek to strike a balance between helping to mitigate cost of living pressures and ensuring sustainability of the public finances. Overall we aim to design policy to protect the most vulnerable in society while also ensuring measures do not add to inflationary pressures. The Summer Economic Statement and the Mid-Year Expenditure Report will be published in the coming weeks.
