Dáil Éireann Debate, Wednesday - 31 March 2021
147. Deputy Jennifer Carroll MacNeill asked the Minister for Finance the details the scale of the increase in both temporary and permanent spending arising from Covid-19; the impact on the structural deficit as a consequence of same; and if he will make a statement on the matter. [17135/21]
Amharc ar fhreagraCovid-19 and the associated public health restrictions have resulted in a significant shock to the Irish economy and our society more generally. The challenges have been unprecedented and Government has responded accordingly.
Last year, the Government made provision for approximately €16.8 billion in direct expenditure interventions in response to the economic impacts of Covid-19 and to support key public services. This included additional funding of over €2.5 billion to support our health service, as well as the introduction of supports for employees and businesses such as the Pandemic Unemployment Payment, the Wage Subsidy Schemes, restart grants and commercial rates waivers.
Furthermore, Departmental Estimates for 2021 presented last December included expenditure on Covid-19 related measures and supports of €6.5 billion. These measures and supports include additional expenditure on employment and income supports arising from Covid-19, including the Employment Wage Subsidy Scheme and the Pandemic Unemployment Payment; ongoing costs in the Health service arising from the pandemic; additional funding in Education and Further and Higher Education and support for the operation of our public transport system given the capacity restrictions in place under public health guidelines.
In addition, a further €3.4 billion was set aside in the Recovery Fund and almost €2 billion in a Contingency Reserve within the overall expenditure ceiling for 2021 of €87.8bn. These reserve funds bring the funding provision for measures to respond to Covid-19 this year to almost €12 billion. I understand that the Department of Public Expenditure and Reform has made a distinction between core expenditure and the additional funds allocated to respond to Covid-19 so that when supports are no longer required, they do not permanently enter the expenditure base.
The substantial additional funding provided across 2020 and 2021 is a result of the exceptional circumstances arising from this crisis. The Government’s focus has been on implementing measures to support our people and businesses experiencing extreme difficulties, while ensuring that our health service has the resources to respond to the pandemic.
While estimates of the structural balance were not published in Budget 2021, my Department is currently working on new estimates which will be published in April as part of a full set of updated medium-term macroeconomic and fiscal forecasts with the Stability Programme Update.
