Noonan says extra €11bn available for five-year public spending

Minister for Finance Michael Noonan has estimated there could be an additional €10 billion to €11 billion available for public spending between next year and 2021.

He said at the time of last year’s budget, his department had estimated a figure of €8.5 billion.

“For next year, again arising from some changes in the inputs of calculation, the net fiscal space is estimated at around €900 million,’’ Mr Noonan added. “I stress this is work in progress and subject to revision.’’

Mr Noonan said there were many moving parts in the calculation, including inputs from the European Commission that only became available over the summer, and this might give rise to further variations in the figure before budget day.

The Minister, who was speaking during a debate on Ireland’s stability programme, said the figures had varied considerably last year between the spring statement and budget day.

He said the Government had a legal obligation to submit a programme to Brussels by the end of April setting out its macroeconomic and fiscal forecasts for Ireland.

He was greatly encouraged, he added, by the economic recovery, with growth rates of 7.8 per cent last year.

“The expansion in economic activity, initially led by the exporting sectors, has broadened with growth now increasingly driven by domestic factors allowing households and businesses plan for the future with a renewed sense of optimism,’’ said Mr Noonan.

“This is very important as the domestic sectors are both jobs rich and tax rich.’’

Minister for Public Enterprise and Expenditure Brendan Howlin said the national approach to essential fiscal adjustment during the past five years was central to maintaining social cohesion, laying firm foundations for a return to growth and restoring Ireland's economic reputation which had helped ensure the continued inflow of foreign investment.

“The key areas of health, social protection and education were prioritised, and together they account for over 80 per cent of all gross current expenditure,’’ he added.

Fianna Fail finance spokesman Michael McGrath said his party welcomed the broad-based economic recovery that was now well underway.

“The priority for the incoming government and for this Dáil, working collectively, must be to secure the economic recovery in the first instance,’’ he added.

“Only after we have made sure it is a fair and inclusive recovery can we decide what to prioritise as we make decisions on how to use the resources generated by that recovery.’’

Independent TD Clare Daly said not long ago someone could leave school and get a permanent and pensionable job in a local authority.

“Now, we have the spectre of graduates working in repeat internships or JobBridge schemes for low wages,’’ she added.

Ms Daly said new recruits in the public sector, be they gardaí or nurses, got less per hour than a worker in Aldi or Lidl.

“It is a race to the bottom and we are building a low-wage economy based on neoliberal economic policies that the stability programme is designed to perpetuate and develop further,’’ she added.