Vol. 459 No. 1
7 Mr. McCreevy asked the Minister for Finance if the commitment in the Programme A Government of Renewal regarding spending increases for 1996 will be met in view of the higher than budgeted increase in the numbers on the live register and other additional spending pressures which are clearly evident; and if he will make a statement on the matter. [17906/95]
29 Mr. J. Walsh asked the Minister for Finance if he will publish the Estimate for the Department of Social Welfare; and if he will make a statement on the matter. [16748/95]
43 Mr. B. Ahern asked the Minister for Finance if it is vital that Government spending be maintained within a 2 per cent increase in real terms for the 1996 budget. [15094/95]
55 Mr. McCreevy asked the Minister for Finance the current status of the 1996 Book of Estimates; the likely date of publication of the Estimates; and if he will make a statement on the matter. [17900/95]
I propose to reply to Questions Nos. 7, 29, 43 and 55 together. I wish to make clear at the outset that the Government remains firmly committed to the fiscal policy parameters set out in our policy programme.
Firm management of the public finances is a necessary part of this Government's strategy for employment and social justice. Maintaining annual borrowing at moderate levels is crucial to securing long-term sustainable growth and employment. Within that context, this Government is committed to a fiscal policy that seeks to maintain low budgetary deficits to continue downward pressure on the debt burden and meet the fiscal criteria set out in the Maastricht Treaty. By reducing the debt burden, we will be able to free up significant resources which are at present pre-empted by debt service costs, and reduce our exposure to adverse interest and exchange rate movements.
In the policy agreement, A Government of Renewal, this Government made a commitment that growth in current supply services spending will be held to an average annual rate of no more than 2 per cent in real terms over each of the forthcoming two budget years to release the fruits of economic growth more substantially for tax reduction and reform.
Indications are pointing to a satisfactory outturn for 1995 but tighter control of public spending in 1996 is absolutely necessary to secure continued adherence into the medium-term of the fiscal consolidation that has been a feature of Irish economic achievement for almost a decade. On the basis of present projections for 1996, adherence to the 2 per cent real growth is essential, not only to remain within the critical 3 per cent Masstricht limit but also to deliver on this Government's commitment to substantial measures for tax reform over the period of the programme. I assure the House that we are fully committed to respecting the spending growth limit of 2 per cent in real terms in 1996.
As I just mentioned, indications are pointing to a satisfactory outturn for 1995 and public spending is on target. While some additional spending pressures have emerged, such as the additional costs associated with higher than anticipated average numbers on the live register, I anticipate that sufficient savings will be available elsewhere to offset in substantial measure these extra costs in 1995. The implications for 1996 expenditure of the increase in the numbers on the live register and other additional pressures which have emerged are being taken fully into account in settling the estimates for 1996.
I remind the House that the decisions on public expenditure which were taken last July were aimed at containing the growth in gross current supply services expenditure in 1996. The main impact of the decision which the Government took on restricting the numbers employed in the public sector will be felt on 1996 spending. These decisions were prudent and timely measures to ensure that the 2 per cent spending target for 1996 will not be exceeded.
The process of settling the 1996 departmental spending Estimates is nearing completion. I have been engaged in detailed discussions with my Government colleagues to ensure that their Departments' Estimates for 1996 are finalised and agreed within the overall targets laid down by the Government. I expect to be in a position to bring these discussions to a satisfactory conclusion in the very near future.
As soon as the Estimates are finalised, the details will be published in the Abridged Estimates Volume and the Summary Public Capital Programme for 1996. The Estimates for the Department of Social Welfare will, of course, be detailed with all the other departmental Estimates in these publications.
Given that the Minister emphasised, today and on previous occasions, the desirability of adhering to the parameters laid down in the Programme for Government, with which I agree, why is it taking so long to publish the Estimates for 1996?
As the Deputy is well aware, it is a difficult exercise. We are talking about a reduction of expenditure, in real terms, as compared with the practice and experience in recent years.
Why is there a reduction?
We are talking about a projected increase of 4.25 per cent in 1996. Last year the figure was 6.9 per cent or 5.8 per cent depending on which way one wants to calculate it——
Or 10.9 per cent.
——and prior to that it was even higher again. We are trying to slow down the momentum taking one year against another. That is proving to be extremely difficult because even with no policy change implications there is pressure on Estimate demands.
Given that there will be carry over costs in the area of social welfare arising from the increases last July and that the live register outturn for 1995 is higher than the estimated figure of 266,000 at the start of the year — consequently, the figure for 1996 is likely to be higher than anticipated — does the Minister agree that if he continues to dilly-dally on the question of when the Estimates will be published the entire process will be brought into disrepute? It is now time to publish the Estimates for 1996 and get on with the job of preparing the budget.
Work on the budget is well advanced. We know the parameters in a number of areas. That work has not been stalled because the Estimates process has not been finalised. I am happy with the progress made to date and I am confident we will be able to publish the Estimates within a reasonable time.
