The Minister for Finance has published the Book of Estimates for 2004 by saying the Government was aiming to "create the conditions necessary for the Irish economy to be strongly positioned to benefit from future economic recovery".
Mr McCreevy said voted expenditure was expected to be €40.4 billion, representing an increase of €1.9 billion or 5 per cent from this year.
The main allocations being set out at a press conference by Mr McCreevy today are €10 billion for Health, an increase of just under €900 million; €6.5 billion for Education, an additional €674 million; and €5.5 billion for investment.
However, public service pay increases will eat into these allocations. The provision for Exchequer-funded public service pay and pensions is €14.2 billion, an increase of €1.1 billion or 8 per cent on 2003. In other words, while overall spending is set to increase by €1.9 billion, the increase in the ammount allocated to public service pay increases is €1.1 billion.
The increase takes account of pay rises under the Sustaining Progress agreement, which is €540 million; the public service pay increases arising from the benchmarking deal of €305 million; and other pay provision worth €265 million.
Mr McCreevy said the Government was committed to honouring benchmarking but the payments were dependent on compliance with the terms of the Sustaining Progress Agreement. He warned that if the conditions are not met in any sector, grade or organisation, the payments would not be made in that area.
The Department of Social and Family Affairs is to be provided with €10.6 billion, but the Estimates do not, as usual, include any provision for increases in social welfare payment rates next year. These will be announced in the December Budget, Mr McCreevy said.
He added that health, education and social welfare spending would account for 67 per cent of total gross spending next year.
The Minister described as a priority the continuation of the process of prudent management of public expenditure to protect the significant economic gains Ireland has made over recent years.
Mr McCreevy said: "a tighter approach and greater prioritisation of spending" was required to protect Ireland's economy. "It is simply unsustainable to continue to increase spending without regard to the resources available to fund it," he said.
The Taoiseach, Mr Ahern, said this level of investment would be significant in any year. "But as an ongoing programme of sustained investment over many years, it will transform our country," he said.
"To people who have lost their jobs or who are concerned about that prospect, to people who have to wait too long for hospital treatment, to people who are stuck in traffic gridlock, to people who are isolated on the margins of our society through lack of opportunity, I believe that the plans we have published today offer hope."
He said the additional resources committed for 2004 are part of a longer term and sustained investment in infrastructure and public services.
"It is this sustained investment - the fruits of prudent management - that has ensured that public investment in Ireland has been nearly double or more than double the European average in each of the past six years," Mr Ahern said.
