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Dáil Éireann díospóireacht -
Wednesday, 20 Mar 2002

Vol. 550 No. 4

Written Answers. - Fiscal Policy.

Bernard J. Durkan

Ceist:

312 Mr. Durkan asked the Minister for Finance if he will outline Government spending as a percentage of GDP for each year from 1995 to date; the projected spend in 2002 at year's end based on figures to date available in 2002; and if he will make a statement on the matter. [9289/02]

Government spending as a percentage of GDP since 1995 to 2002 is set out in the following table. For the sake of completeness current figures include both net voted and non-voted current spending together with expenditure from the social insurance fund and the national training fund. Capital figures include both net voted and non-voted capital spending.

% of GDP

Current

Capital

Total

1995

33.9

2.9

36.8

1996

31.9

3.2

35.1

1997

30.2

3.0

33.3

1998

27.1

3.8

30.9

1999¹

25.3

9.6

34.9

2000¹

23.1

6.3

29.4

2001

24.2

5.2

29.5

2002

25.2

5.4

30.6

¹ The capital percentage in 1999 and 2000 is increased by the significant once-off payments to pensions prefunding in 1999 and 2000 –€3.1 billion and €1.5 billion, respectively – and payments towards the cost of future pension liabilities of certain employees and former employees of An Post and Telecom Éireann –€1.6 billion – which were funded from the proceeds from the sale of shares in Telecom Éireann.
The foregoing figures show that total spending as a percentage of GDP has fallen between 1995 and 2002. There have been very substantial increases in real terms in public expenditure over the period but the rate of increase in GDP has been faster.

Bernard J. Durkan

Ceist:

313 Mr. Durkan asked the Minister for Finance the extent to which current Government spending exceeds previously set guidelines; and if he will make a statement on the matter. [9290/02]

In its programme for Government, An Action Programme for the Millennium, which was agreed in 1997, this Government agreed a target of 4% per annum for increases in net current spending, calculated on an annual average basis.

The following table illustrates the increase in net current spending over the period 1998 to 2002.

Annual average increase in spending

1998

2%

1999

4%

2000

5%

2001

7%

2002

8%

Against a background of strong economic growth in recent years, the Government has been in a position to make considerable progress in providing necessary resources to deliver on its commitment to improved public services. The Government is satisfied that the benefits flowing from the increased spending in key areas such as health, education and social welfare, more than justify its acceptance of a growth rate in net current expenditure above the target set out in the 1997 programme.

Bernard J. Durkan

Ceist:

314 Mr. Durkan asked the Minister for Finance the steps he has taken or proposes to take to curb excess of Government spending; and if he will make a statement on the matter. [9291/02]

I am committed to ensuring that spending in 2002 does not exceed the limits set out in the Revised Estimates Volume as published on 28 February last.

I have already briefed both my ministerial colleagues and Secretaries General of Departments on the need to exercise firm control over public spending this year.

In addition to the normal expenditure monitoring and control procedures which are operated by my Department throughout the year, I have also initiated a monthly report to Government on trends in spending and receipts based on the information available for the end month Exchequer statement. This will enable the Government to take immediate corrective action in the event of unanticipated pressures emerging as the year progresses.

Bernard J. Durkan

Ceist:

315 Mr. Durkan asked the Minister for Finance the areas of Government spending which in 2002 to date show shows signs of the greatest overrun; and if he will make a statement on the matter. [9292/02]

The published end-February Exchequer statement showed that voted current and capital issues to Departments were up some 22% over the same period in 2001 in comparison with a forecast increase of 14% for the year as a whole.

The published end-month Exchequer statement does not provide a current-capital split of the total figure. However, I can tell the Deputy that at end-February net voted current spending was up some 19% and net voted capital spending increased by 32% to end-February 2001. The figures can be affected by timing factors either in 2002 or in the base year, 2001.

On current spending the Votes which showed the biggest increases were Health and Children, Social, Community and Family Affairs, Agriculture, Food and Rural Development and Public Enterprise.

The increase in spending by the Department of Health and Children is generally a reflection of timing issues arising from a lower drawdown from the Exchequer to end-February 2001 in comparison with the drawdown in January and February 2002. In the case of Social, Community and Family Affairs the increase was in line with the forecast increase provided for in the Revised Estimates and reflects earlier payment dates in 2002 in comparison with 2001.

Spending by the Department of Agriculture, Food and Forestry to end-February 2002 includes BSE compensation and other payments which were not made until later in 2001 either because the BSE scheme had not yet commenced at this stage last year and owing to particular delays in 2001 arising from the precautions taken to prevent the spread of Foot and Mouth Disease. The increased spending by the Department of Public Enterprise reflects a timing issue. Payments to CIE were made later in the year in 2001 whereas the payments up to end-February 2002 are in line with the expected profile.

The increase in capital spending is mainly due to spending by the Department of Environment and Local Government. Spending on roads, water and housing is up on this time last year.

I am committed to ensuring that spending for the year as a whole will remain on target and I have made this clear to all Departments.

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