Increase in health and education spending in Estimates

In the midst of a situation which the Minister for Finance Mr Charlie McCreevy described as having "considerably weaker economic growth in 2001 and 2002 than anyone could have predicted", it was announced this morning that an extra €800 million will be spent on the health services in the State next year.

the Minister for Finance Mr Charlie McCreevy

Commenting on Ireland’s economy being affected by events in America, the Minister said "Activity there should pick up next year, but it may not...

"We need to plan on the basis of much slower growth next year than we had anticipated," he said.

As a result of the current economic environment, Mr McCreevy said that "I decided therefore to concentrate the available resources in a number of key areas".

Amongst those areas to receive major spending increases are Education, which will receive an extra €540 million and Social, Community and Family Affairs, which will get a €350 million boost.

The total net public spending estimate for 2002 is up more by more than €2 billion on last year at €27.052 billion.

Identifying health as a key policy area, the Minister said the 15 per cent funding increase gives a more accurate reflection of overall levels of activity.

The total allocation for the Department of Health and Children is now expected to be to €7.3 billion - up from nearly €4 billion in 1997.

We need to plan on the basis of much slower growth next year than we had anticipated. Minister for Finance Mr Charlie McCreevy

Health will also gain €443 million for capital development in 2002, an increase of 29 per cent on the 2001 allocation.

Asked about his views on the possible inefficient use of resources in the health services, Mr McCreevy replied that "We’re spending a lot of money on health and I expect to get a good return on it".

Refering to the fact that Ireland had a younger than average population and thus could be expected to have less requirement on health spending, the Minister posed the question that "If we’re spending this amount of money [on health] now, how much will we be spending in 20-25 years time?"

It was put to Mr McCreevy that he had been ‘talking down’ the economy in the last two months, to which he replied "I don’t think I’m trying to talk down economy, I’m just being realistic".

Mr McCreevy said funding given to Education and Science would increase by 13 per cent to €4.5 billion in 2002, a year-on-year increase of €515 million.

Education initiatives that should benefit from the increase include improved third-level access for the disadvantaged and for adult and youth-education programmes.

The Department of Social, Community and Family Affairs will see a spending rise of 8 per cent to €353 million although, as usual, this estimate does not include provision for Social Welfare payment increases next year.

Mr McCreevy said Overseas Development Aid would receive an additional €132 million, bringing Ireland’s overall contribution to €463 million in 2002 - equivalent to 0.45 per cent of GNP.

The minister also unveiled large spending increases for capital projects with roads and public transport spending granted an increase of 8 per cent to €1,268 million.

Total capital expenditure for 2002 is projected at €4,976 million. €840 million will be spent on local authority and social housing projects.