Ceisteanna—Questions. Oral Answers. - Government Expenditure

Charlie McCreevy

Ceist:

42 Mr. McCreevy asked the Minister for Finance the expenditure cuts, if any, he proposes to achieve the promised real increase of only 4 per cent in Government current expenditure for 1997 as compared with the 1995 outturn. [16731/96]

Liz O'Donnell

Ceist:

79 Ms O'Donnell asked the Minister for Finance if he will make a statement on the likely growth in supply service expenditure in 1996. [16768/96]

I propose to take Questions Nos. 42 and 79 together.

The position on spending in 1996 is being closely monitored. There are upward pressures on certain areas of current and capital spending. As we move into the last quarter of the year the position will begin to firm up and, as in previous years, it is likely that expenditure savings will begin to materialise. The publication of the end-September Exchequer returns next week should give a clearer view of the emerging position on supply services spending.

It would be premature to state what changes in expenditure programmes will be made in 1997 before the 1997 Abridged Estimates and Public Capital Programme are laid before the Dáil. In July, my Department issued in the Estimates Circular, guidelines to Departments on the approach to be followed in preparing their 1997 Estimates proposals. Consideration of the proposals of Departments is well under way.

As the Minister well knows, A Government of Renewal contained a firm commitment in regard to the increase in the level of supply services one year over the next. It states:

Over the period of this Programme it is intended that the growth of current supply services spending will be constrained to a maximum of 6 per cent, in nominal terms in 1995, and to an average annual 2 per cent in real terms over the following two years of the Programme.

In the preparation of the 1996 Estimates the Minister had to overshoot the annual average inflation rate of 2 per cent, he could not adhere to that figure. What is the programme for 1997? Will the commitment contained in A Government of Renewal be adhered to because, if that is the case, it will mean the relevant increase over 1995 will not be greater than 4 per cent, the rate of inflation over those two years being somewhat less than was forecast, plus 2 per cent, resulting in a figure of less than 4 per cent. That firm commitment was given for very good reasons. Will the Minister say whether it will be adhered to in the preparation of the 1997 Estimates?

The preparation of the Estimates for 1997 is continuing. The targets that have informed their preparation are in line with the overall programme for Government, including the commitment to which the Deputy referred. At this stage I am not in a position to go beyond what I said in my reply.

The Minister did not say the commitment in the programme for Government is to be strictly adhered to. Do I take it, therefore, that the 1997 Estimates will be in conformity with the commitment given in A Government of Renewal drawn up between the Fine Gael. Labour and Democratic Left parties which will mean that increased expenditure in 1997 over 1995 will be of the order referred to in my question? Is the Minister now giving the House an assurance that the 1997 Estimates will conform to that commitment?

No chance of it.

The Government objective is to meet the commitment set out in A Government of Renewal and we are endeavouring to do so. I will not give any false or unrealistic promise. When the preparation of those Estimates has been completed, at the appropriate point, I will communicate the position having regard to all the circumstances.

Public expenditure rose by 11 per cent in 12 months.

In other words, the commitment in A Government of Renewal in regard to public spending will not be adhered to and is not worth the paper on which it was written. Is the Minister saying, that commitment has been abandoned?

While everybody has laudable objectives, the Minister has just said he hopes to receive sanctifying grace or whatever in the course of 1997. I put it to him that commitment has been abandoned and that public spending will not conform to the commitment in A Government of Renewal which formed the cornerstone of the programme for Government?

It rose by 11 per cent last year.

I will not go beyond the elaborate, definite reply I have already given.

Public spending is out of control.