Government borrowing ‘€13 million a day’ to fund spending

The Government is borrowing €13 million a day to fund spending and the State is not clear of all economic danger, Minister for Public Expenditure Paschal Donohoe has said.

“The economy, through growing strongly, is still vulnerable to economic shocks, particularly international shocks such as those that could be posed by Brexit,” he said.

Speaking during a Dáil debate on Fempi, the financial emergency legislation, he said its immediate repeal would be unaffordable.

“Consider pay alone, which would cost an additional €1.8 billion above the 2016 allocation for pay restoration,’’ Mr Donohoe added. “This would violate the terms of the stability and growth pact and leave nothing for the other priority areas for the people we represent.”

Mr Donohoe said the phased approach of the Lansdowne Road agreement provided the mechanism to deliver pay restoration over the next three years at a total cost of €844 million in 2018.

By the end of this year, the Government would have been able to hire an estimated additional 18,000 public servants to do the work needed in communities all over the State, he said.

That was at a cost of an extra €1.1 billion, spending that he said was absolutely necessary to help those people represented by members of the House.

Social Democrats TD Róisín Shortall said the reduction in pay for new entrants to the public service was having a devastating affect on teachers, gardaí and nurses.

“Not to mind buying a house or having a family, they cannot survive financially in terms of paying rent and normal overheads on the level of salaries that are available,” she added.

Fianna Fáil TD Fiona O'Loughlin said public servants had been asked to take a huge hit for the past seven years. It was a long time in family life, with increasing bills reducing every aspect of their standard of living, she added.