Budget preparation creates cause for concern

Issued 20 July 2017

The Mid-Year Expenditure Report published today by Minister Donohoe makes for very worrying reading, while his appearance at the Budgetary Oversight Committee has created even greater cause for concern.

Deputy Howlin commented:

“Firstly, we find that there would appear to be a further €48m to be found this year to pay the cost of bringing forward pay increases under the Lansdowne Road Agreement. Secondly, we now have confirmation that €178m will be the cost of water refunds to be found this year. And thirdly, we see that the cost of the Christmas bonus paid last year was a further €200m, and no allowance has yet been made for this.

“In other words, to stand still, the Government needs to find €426m in savings this year, assuming that absolutely no Government Department exceeds their budget in any way this year. So far, they have only found €265m in current spending, and we have yet to hear any asks from the Department of Health.

“The suggestion that capital spending, already budgeted at far too limited a level, might now be cut would simply be intolerable.

“In relation to the so-called Spending Review, this seems to have been a completely pointless exercise.

“To take the education chapter as an example, the broad conclusion is that demographic growth and additional spending on special needs education have broadly driven increased expenditure, and that demographic growth will flow through all sectors of education over the next 20 years. Bluntly, if members of Government needed a dedicated review to find this out, then they haven’t been paying even cursory attention to that sector for the last decade.

“For weeks now, we have been told that every aspect of the totality of the budget was being examined. The Taoiseach even hinted that this might result in some hidden fiscal space. But the review published contains no detailed analysis, and certainly nothing like the two comprehensive spending reviews were carried out over recent years. That probably explains why the front cover includes a prominent disclaimer allowing the Minister and all Government Departments to distance themselves from it.”