Dáil Éireann díospóireacht -
Thursday, 25 Feb 1999

Vol. 501 No. 2

Written Answers. - Capital Spending.

Derek McDowell

Ceist:

38 Mr. McDowell asked the Minister for Finance the reduction, if any, the Government intends in the rate of increase in capital spending in 2000 and 2001 as indicated by the stability programme submitted to ECOFIN in January 1999; the figures in cash amounts for the volume of total Government capital investment indicated in the programme; and if he will make a statement on the matter. [5436/99]

Minister for Finance (Mr. McCreevy)

The stability programme submitted to ECOFIN in January 1999 sets out the following amounts in total Government investment as a percentage of GDP for the period 1998-2001:

	1998	1999	2000	2001
Total Government Investment (as percentage of GDP	3.5 per cent	3.8 per cent	3.8 per cent	3.7 per cent

The equivalent cash amounts for gross capital spending are given below.

These are based on the 1999 post-budget allocation, voted and non-voted, set out in Table 1 of the 1999 budgetary statistics, which were published as part of the budget documentation circulated to the Dáil on 2 December 1998. However, in preparing the stability programme, the 1998 allocations shown in Table 1 were reduced by £130 million to take account of the following once-off payments in that year: repayment of Telecom Éireann promissory note and a payment to the Irish Aviation Authority pension fund, neither of which are infrastructural investment.

	1998	1999	2000	2001
	£m	£m	£m	£m
Gross Capital Spending (1999-2001 from Table 1 of 1999 budgetary statistics, 1998 as adjusted).	2,008	2,360	2,518	2,648
Percentage increase over previous year	21.4 per cent	17.5 per cent	6.7 per cent	5.2 per cent

(Note: If allowance is made for the impact of the new local authority financing arrangements as well as the repayment of Telecom Éireann debt and the payment to Irish Aviation Authority pension funds, there was a 29 per cent increase in gross capital spending in 1999 over 1998. The 1998 outturn may be subject to slight revision. The final 1999 allocation will be presented in the forthcoming public capital programme.)

Substantial increases in capital expenditure were allocated by the Government in 1998 and 1999 to provide for major investment in roads, public sector transport and water and sewerage services, with the aim of addressing existing bottlenecks and promoting further growth in future years. The budget and economic strategy presented in the stability programme will maintain this approach. In particular, it will continue to add significant resources to a larger expenditure base, to reduce Ireland's infrastructural deficit, while at the same time continuing prudent management of the budget and the economy over the medium term.