Dáil Éireann Debate, Thursday - 19 January 2023
220. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the degree to which public expenditure has been affected by international events; the way such fluctuations can be ameliorated in the short and medium term; and if he will make a statement on the matter. [2584/23]
View answer221. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the extent to which public expenditure targets remain in line with expectations and are likely to do so in the coming year; and if he will make a statement on the matter. [2585/23]
View answer224. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the degree to which his Department continues to measure the impact of inflation which might affect his Department’s ability to maintain good practice and at the same time ensuring that efficiencies and reforms continue in such a way as to be of most benefit to the economy; and if he will make a statement on the matter. [2588/23]
View answerI propose to take Questions Nos. 220, 221 and 224 together.
International events such as Brexit; Covid-19; inflation and the humanitarian consequences of the war in Ukraine have posed significant challenges to Ireland in recent years. Public expenditure has adjusted to meet the changed circumstances imposed by these external events through providing additional temporary funding to support our public services, households, individuals and businesses. These international events are expected to be temporary challenges and have been treated as such. Nonetheless mitigating the impacts of these challenges has required public resources to be deployed at an exceptional scale. Funding of supports for these external shocks has been treated separately from the core day-to-day expenditure allocations. This allows continued focus on longer term goals such as investment in infrastructure and public services while dealing with key emerging temporary issues as non-core spending. This seeks to ensure our public finances are sustainable into the future.
The extent of the additional funding provided can be seen in the end 2022 spending figures which were published at the beginning of this month with gross voted expenditure reaching €88.8 billion. This reflects both the supports provided towards the challenges posed by international events and continued investment in public services — including substantial increases in capital investment and delivery through the National Development Plan. Compared to the total amount allocated after supplementary estimates, total gross spending was €1.9 billion or 2.1% lower than expected. For 2023 spending, Departments are due to submit a breakdown of how they intend to spend their allocations by month to my Department in February. This will be used to monitor how spending is progressing compared to plan with figures published each month in the Fiscal Monitor.
The rate of inflation continues to remain elevated and my Department, alongside the Department of Finance, will continue to closely monitor economic developments during 2023. Measures introduced to date provide substantial support. However, Government cannot protect all households and businesses against the full effects of inflation as the level of resources available are finite and to do so would lead to further inflationary pressures. The measures that have been introduced recognise the particular challenges faced by those on lower and fixed incomes, were capable of being introduced swiftly and are largely temporary in nature. This seeks to ensure the most effective use of public resources.
Budgetary and expenditure reforms remain a key feature in terms of public expenditure and budgetary management throughout all Departments. This important goal is progressed in a number of ways including through day-to-day management of resources, regular engagement across Departments and through the public service reform programme. It is also progressed through a range of important budgetary reform initiatives including, but not limited to:
- Performance Budgeting;
- Equality Budgeting;
- Green Budgeting;
- Well-being budgeting; and
- The Spending Review Process. These reforms place an emphasis on broadening the approach to how public expenditure is appraised, implemented and reviewed, and also the impact of public expenditure across different cohorts of society and different categories of expenditure. They work in tandem with broader initiatives, such as the establishment of the Irish Government Economic and Evaluation Service (IGEES), to develop capacity and enhance the role of economics and value for money analysis in public policy making.
While each reform may be considered in isolation, it is important to recognise that each represents one part of the overall reform process. Together, these budgetary reforms aim to provide a more comprehensive and thorough insight into how public services are supporting the Irish population.
