Dáil Éireann Debate, Thursday - 16 June 2022
106. Deputy Willie O'Dea asked the Minister for Public Expenditure and Reform his views on the assessment by the Irish Fiscal Advisory Council that the current unexpected inflation highlights some issues with the design of spending rules; and if he will make a statement on the matter. [30529/22]
Amharc ar fhreagraThe Fiscal Council in their recent Fiscal Assessment Report, have considered the economic and budgetary projections and in this report have provided a view on spending rules in an inflationary environment. I, along with my colleague the Minister for Finance, will consider this report. The Minister for Finance will provide a formal reply in the coming weeks. Regarding spending rules, our domestic rule is encompassed in the Government's budgetary strategy.
The 2021 Summer Economic Statement set out the Government's medium term budgetary strategy. This strategy aimed to return fiscal policy to a sustainable path while continuing to invest in our public services. It set out a commitment to align core expenditure growth to the trend growth rate of the economy. This seeks to ensure that increases in core expenditure are sustainable both now and into the future.
The medium term expenditure strategy is based on the dual objective of returning fiscal policy to a sustainable path—following the considerable investment since 2020 in Covid supports—and providing continued investment in public services and public infrastructure. In this way, the strategy recognised that sustainability of expenditure relies on a combination of both a sustainable expenditure growth rate and delivery of sustainable public services. Overall the strategy must be responsive to key macroeconomic developments.
Over the coming weeks, I will be engaging with my colleague the Minister for Finance to prepare the Summer Economic Statement. This will set out the budgetary parameters for Budget 2023 taking account of an increasingly challenging and complex economic context.
