Overview: Brian Cowen unveiled an Estimates package that will bring the pre-Budget cost of running the State next year to more than €54 billion as the coalition Government faces into its second re-election campaign since coming to power in 1997. The Minister for Finance kept any surprises he may be planning in reserve for his third Budget next month.
In line with his two previous spending plans, some of the biggest funding increases went to the health and education services. The Garda will also receive a big increase in funding.
On the capital side, the Government continues to invest heavily in roads infrastructure. The largest capital increase was for public transport projects.
With two million people in employment in the State, the economic backdrop to this package was positive. Thus the watchword in this round of Estimates was prudence. Day-to-day spending will rise by €3 billion next year and capital spending will rise by €1 billion.
With social welfare increases and the possibility of some taxation concession still to come in the Budget, the measures in the Estimates comprise €46.7 billion in current expenditure and €7.6 billion in capital expenditure.
While this amounts to an increase of 8.1 per cent over the forecast outturn in total expenditure for 2006, much of the increase will go on the public sector pay bill.
The health provision of €14 billion represents an increase of 11.3 per cent over spending in 2006. However, Mr Cowen indicated that he will make a further allocation in the Budget.
"Just under €500 million of the increase is being provided to cover additional pay costs in the health sector," Mr Cowen said.
With €180 million going for health and hospital service improvements, €360 million will go to the repayment scheme for people wrongly charged for long-term care in State institutions.
Some €130 million will cover four early childcare payments next year, compared with three payments in 2006. Mr Cowen also set aside €120 million for rising costs in the drugs payments scheme.
Expenditure on disability services will rise 10 per cent to €3.6 billion, with the bulk of the rise going on health, education and training.
The €8 billion allocation for education services represents a rise of 7.7 per cent in forecast expenditure this year. Some €2.64 billion of current spending will go to primary level services, with €2.74 billion going to post-primary and € 1.8 billion going to the third-level sector. Of the €563 million increase, €355 million will go on pay.
Mr Cowen said such expenditure will pay for an additional 800 teachers, to help reduce class sizes, while funding the employment of 1,400 additional special needs assistants to help services for young people with disabilities.
Also included in education package was an additional €20 million for school buses, a rise of €45 million in funding for the Strategic Innovation Fund, and additional funding on science, technology and innovation.
Spending in the justice area will rise 9 per cent to €2.4 billion, some €971 million of which will go on Garda pay. Some €150 million will be used for a capital spending to modernise IT and communications equipment used by the force.
But the Government investment on the roads network will continue to be its biggest area of capital expenditure. The allocation rose 9 per cent to €1.5 billion, bringing to €8 billion the Government expenditure on roads in the 2002-2007 period.
"Eight road projects over 84km in length are scheduled for completion in 2007 and six roads projects 221km in length will begin construction in 2007. The 2007 provision will fund the continuing upgrade of the major inter-urban routes," Mr Cowen said.
Capital expenditure on transport will rise 58 per cent to €780 million. Projects scheduled for next year include work to increase the capacity of the red Luas line by 40 per cent. Money will also be provided for the Cherrywood Luas project in south Dublin and for the extension of the red line to the Docklands area.
In addition, Mr Cowen said the funding will be used to start work on the Western Rail Corridor and on the the Cork commuter service network. The money will also pay for 160 new buses for Bus Éireann, in addition to the 100 new buses for Dublin Bus recently agreed.
The Minister said a provision of €1.3 billion for housing will fund the Government commitment in the Towards 2016 partnership agreement to meet target of 27,000 social housing in 2008-2009 and 17,000 affordable housing starts.
In the controversial area of overseas development aid, Mr Cowen said expenditure would increase by 21 per cent to €814 million next year. This is in line with the Government's revised commitment to reach the target of 0.7 per cent of gross national product by 2012.
With spending on agriculture on the rise by €116 million to €1.4 billion, other measures in the Estimates package included increased funding for broadband services, mainly in rural areas.
