Overview:The cost of running the State will rise to almost €50 billion in 2006 from about €45.6 billion this year, writes Arthur Beesley, Senior Business Correspondent
Health, education and social welfare services will receive the bulk of the €2.7 billion rise in day-to-day spending by the Government next year, but much of the increase will be used to pay employees' wages .
The Estimates package unveiled yesterday by Minister for Finance Brian Cowen will see the cost of running the State rise to almost €50 billion in 2006 from about €45.6 billion this year.
The money available to Mr Cowen for the Estimates reflects robust revenues from VAT, stamp duty and income tax receipts, although corporation tax receipts are slightly down. However, the upfront charges for health and some other services are also rising.
While the expenditure next year includes €6.6 billion in capital spending on infrastructure and building projects, the specific plans for this money will not be revealed until budget day.
Current expenditure, the day-to-day cost of providing public services, will break through the €40 billion threshold for the first time next year, with a total provision of €42.2 billion.
From the total increase of €2.7 billion, €1.1 billion will be spent on pay and pensions for civil and public servants. This sum will rise if a successor to the Sustaining Progress pay deal is agreed when it lapses in the middle of next year, although there is no provision in the Estimates for such an increase.
The increase in the pay bill partly reflects the projected recruitment next year of an additional 3,000 workers for State services, bringing total public sector employment to 293,000.
Mr Cowen said additional staff were required for front line services in the Government's "priority" areas of health, education and social welfare, which will receive almost €1.9 billion of the overall rise in current expenditure.
The allocation to Minister for Health Mary Harney goes up by €750 million to more than €12 billion, €254 million of which will go towards new services. A separate allocation of €400 million will be used to cover the cost of a refund of illegal nursing home charges.
There will also be more money for out-of-hours GP services and the National Treatment Purchase Fund. The Government plans to build a new maternity unit at Cork University Hospital. University College Hospital, Galway, will receive a new burns unit and Our Lady's Hospital for Sick Children in Crumlin will receive a new MRI scanner.
The health budget includes money for disability services - these will be spent on respite, residential and day care. Separately, Mr Cowen said he was increasing the overall allocation for disability services to €3.3 billion from €3 billion.
The allocation to Minister for Education Mary Hanafin will rise by €530 million to €7.2 billion next year, an increase of some 8 per cent. Included in this sum is €90 million, which will be used in part to pay for 425 new teaching posts in primary schools. This is in addition to the 75 new teachers announced for disadvantaged schools earlier this year.
In addition, the money will pay for the purchase of new school buses and the hire of additional mini-buses. It will also be used to fit existing school buses with seat-belts, with the "three-for-two" arrangement to be phased out by the end of 2006.
The initial allocation to Minister for Social and Family Affairs Séamus Brennan is €12.4 billion, €230 million more than in 2005. But this is a provisional figure only, as the general round of social welfare increases will not be granted until budget day next month.
Budget day will also see the unveiling of a new childcare package from the Government. However, Mr Cowen said yesterday that he was providing an additional €55 million for current expenditure and €47 million on the capital side to bring the number of childcare places to 30,000 next year from 26,000 at present.
Included in the additional €105 million provision to the Garda is the cost of recruiting an additional 700 gardaí, bringing the strength of the force to 12,920 next year. The overall allocation for the Garda next year is €1.2 billion, up 9 per cent.
Although the specific transport plans must also wait until the budget, Martin Cullen said construction would begin next year on the Luas extension to Cherrywood, the "four-tracking" of the Kildare mainline rail route, the Dublin Docklands train station and the Cork commuter services development.
Minister for Foreign Affairs Dermot Ahern said the Government will increase spending on overseas development aid to €675 million from €545 million, an increase of 24 per cent. Funding for Irish emigrant groups will rise to €12 million from €8.2 million.
Mr Cowen also gave €3 million for the establishment of the new National Consumer Agency, and an additional €750,000 to the cartels unit of the Competition Authority.