Update: Maintaining Spending Policies, 3rd July 2015

The fiscal adjustments implemented in order to successfully return sustainability to the public finances required the introduction of significant policy measures. Gross voted expenditure was reduced from its peak of just over €63 billion in 2009 to €54 billion in 2014.

Budget 2015 marked a turning point in our recovery when expenditure reductions were no longer required to meet our fiscal targets and we were in a position to provide targeted increases for frontline services.

As outlined in the Spring Economic Statement (SES) a number of key economic and fiscal  variables have been revised, with  these changes lowering our forecast deficit in 2015 to 2.3%. This will see Ireland exit the Excessive Deficit Procedure at the end of 2015.

Now as we look forward to 2016, it is important that we plan carefully to ensure that we invest public money in prudent ways that will be of maximum benefit to society.

The SES has outlined fiscal space of between €1.2 billion to €1.5 billion for 2016, half of which will be directed towards expenditure increases. This will allow spending pressures, including demographic pressures in key areas, to be addressed and allow for new measures to further enhance public services.

As the economy continues to recover, we will look to build on the significant and wide-ranging public service reforms implemented over recent years as these reforms  will continue to play an important  role in  releasing further funds for reinvestment in key public services.

In relation to requests for increased capital investment,  I will shortly be publishing a new capital envelope for the period to 2020.   This  will look to prioritise spending aimed  at supporting and underpinning economic recovery and providing social infrastructure.

As the Deputy is aware, managing the delivery of public services within agreed budgetary allocations is a key responsibility of each Minister and Department. My Department  monitors voted expenditure throughout the year to compare drawdown of funds from the Exchequer against published expenditure profiles.  At the end of May,  total spending   was €116 million (0.5%) below profile.     As we move into the preventive arm of the Stability and Growth Pact in 2016, it will be important that Departments continue to prudently manage delivery of services within their expenditure ceilings.