The banking crisis in 2008 and subsequent recession had a profound impact on the public finances, as everybody in this House knows. The scale of the challenge facing both the economy and the public finances was considerable with gross voted expenditure being reduced from its peak of €63.1 billion in 2009 to €54 billion in 2014, a reduction of 14.4%.
The Government's priority has been to protect the vulnerable in society and support economic growth to the greatest extent possible during that process. Therefore, in implementing expenditure reductions, all Departments and agencies were required to seek savings, pursue efficiencies and manage within constrained budgets, often while meeting increased demand from the general public for services.
With the recovery in the economy and the improvement in the fiscal outlook, in deciding on expenditure allocations in the comprehensive review of expenditure, the Government has been able to provide for a year-on-year increase in expenditure. This expenditure increase is targeted at key areas such as health, social welfare provision and most of all social housing.
Our programme of public service reform has also made a vital contribution to ensuring that public services are delivered in a more efficient and effective manner. The efficiency and productivity measures the Government has introduced have played a fundamental role in mitigating the impact of the necessary expenditure reductions. We have made very strong progress on public sector reform to reduce costs and improve services, and this will remain a key element of our recovery strategy.
Returning stability to the public finances is a necessary prerequisite to creating an environment that encourages economic growth. The Deputy will be aware that economic growth in Ireland is now the highest in Europe and unemployment at the end of January was at 10.5%, down from its peak of over 15% in 2011. As a sign of confidence in the Irish market, employment at IDA Ireland-supported firms reached a new record of 175,000 in 2014.
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With the improved economic and fiscal position, the Government is fully committed to correcting the fiscal deficit and to using our recovery wisely through retaining and augmenting the benefits from public service reform. As the fiscal situation continues to improve, we will look to build on the progress already made in returning the unemployed to work and ensuring that economic growth is supported.
