Minister McGrath updates Cabinet on Expenditure Management and Spending Strategy for Budget 2022

The Minister for Public Expenditure and Reform, Michael McGrath TD, today (Wednesday), updated Cabinet on the end of August expenditure position and preparations for the forthcoming Budget. Some of the highlights include:

Overall gross voted expenditure by Departments was €53.4 billion. This was almost €1.7 million (3.0%) below profile and €1.35 billion (2.6%) higher than expenditure for the same period in 2020.
Gross voted current expenditure of €49.7 billion was just over €1 billion or 2.0% behind profile and over €1.7 billion (3.6%) ahead of last year.
Gross voted capital expenditure of €3.7 billion was €652 million or 14.8% below profile and €385 million (9.3%) below the same period last year. Capital spending in the period to the end of August amounts to 36% of the capital expenditure allocation for the year.
The Budget Estimates for 2022 will include a €4.2 billion increase in core expenditure, comprising €3.1 billion in current expenditure and €1.1 billion in capital expenditure;

Speaking on the expenditure Strategy for Budget 2022, Minister McGrath said:

“Preparations for Budget 2022 are well underway in my Department and I will be engaging with Government colleagues intensively in the coming weeks. The baseline position for negotiations was set out in the Mid-Year Expenditure Report and the expenditure ceiling for 2022 of €88.2 billion was outlined in the Summer Economic Statement.

“The Government is focused on delivering in respect of the key commitment in the Programme for Government in the areas of Health, Housing and Climate Change, and other pressing challenges. This will be done within the fiscally prudent framework we have set out which charts a clear path to reducing the General Government Balance to 1.5% of GDP by 2025. By 2023, it is intended that Government borrowing would only be for capital investment purposes.

“The lifting of some pandemic-related restrictions has already been implemented, and further changes are planned in the weeks ahead. After an incredibly difficult eighteen months, this is a most welcome development. We are committed to maintaining the necessary expenditure to continue to protect lives and livelihoods in to 2022. We have made provision for a further €6.8 billion of Covid expenditure next year, bringing the total commitment to date to over €38 billion, demonstrating the unprecedented level of support provided. We are experiencing a strong rebound in the Irish economy and the supports the government has provided has played a direct role in this.

“We have demonstrated our determination to invest in the future well-being and growth of the country by committing to a further €1.1 billion increase in capital expenditure next year, building on the significant increase in Budget 2021. This spending will underpin the commitments made in the recently launched Housing for All and the revised National Development Plan which we will be launching in advance of the Budget.”

ENDS