Donohoe sees €500m in unallocated spending next year

The Government will have about €500 million in unallocated spending next year if current rates of economic growth continue, Minister for Public Expenditure Paschal Donohoe has said.

He said this would be the estimated amount available once the commitments the Government had made on increased levels of social welfare and funding tax reform were honoured.

“This is a significant amount of money, but given the competing demands for additional spending, additional services and changes in our tax structure, it is an amount of money on which careful choices will have to be made.’’

The Minister told the Dáil the growth rate last year was about 5 per cent. “We should see growth this year of approximately 4.5 per cent, and we are expecting a growth rate next year of 3 to 3½ per cent.’’

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He said a key factor was Ireland was currently participating in the excessive deficit procedure of exiting from a bailout programme and, under the fiscal rules, it must deliver the medium-term objective of having a balanced budget next year.

“When we deliver that the position then changes significantly for subsequent years, and that is the key factor in terms of the availability of resources for next year. I emphasise that those resources will be very scarce against the array of demands placed against them.’’

Pay talks

Replying to Fianna Fáil spokesman Dara Calleary, the Minister said he expected the Public Service Pay Commission to report next month or before it.

Mr Calleary said the public service pay talks should be completed ahead of this year’s budget.

He said teachers would gather next week across the island for their annual conferences. “What message can we, as public representatives, give to new-entrant teachers, or new entrants of any grade in the public service or Civil Service in regard to their status ?’’

Mr Donohoe said discussions would be very difficult, as would all the proceedings for next year. Progress had been made on new entrants under the Haddington Road agreement. “We will look to make the particular changes in that area as part of an agreement with the INTO and TUI.’’

Mr Calleary said the draft version of the stability programme update, published this week, contained positive figures for growth in the economy.

He said Minister for Finance Michael Noonan had told the committee on budgetary oversight he would not be in a position to look at that properly and publish a figure until June, but he might be in a position to modestly increase it if the growth figures continued.

Timing

Mr Donohoe said that was exactly his understanding of the timing involved, adding any revision of the figures would be a matter for Mr Noonan’s department.

On Brexit, Mr Donohoe told Independent TD Mattie McGrath it posed significant challenges right across the economy. “The Government is committed to addressing these challenges, to mitigating the impacts, and to maximising the available opportunities.’’

In the short term, he added, Mr Noonan and himself were able to deliver a budget for 2017 setting out the approach to Brexit and to building a national response.