Rose Conway-Walsh (Mayo, Sinn Fein)
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36. To ask the Minister for Public Expenditure and Reform to provide an update on the budgetary package for public expenditure outlined in the summer economic statement; and if he will make a statement on the matter. [29544/24]

Seán Canney (Galway East, Independent)
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Before she deals with her question, Deputy Conway-Walsh would like to say something.

Rose Conway-Walsh (Mayo, Sinn Fein)
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I really appreciate that. I take this opportunity to offer my sincere condolences to the family of John O'Mahony. My thoughts and prayers are with his wife, Gerardine, and their five daughters, as well as the wider family and friends, including his wider family in the GAA and the Fine Gael Party. I offer my condolences to the Minister, Deputy Donohoe, and all his colleagues. I served with John in the Seanad and always found him to be an absolute gentleman. Ar dheis Dé go raibh a anam dílis.

It will be no surprise that my first question is about the summer economic statement, which was issued today. In particular, I ask about how much of the budget package will be allocated to new measures. Why is the general Government balance not outlined as it normally is in the summer economic statement?

Paschal Donohoe (Dublin Central, Fine Gael)
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The summer economic statement demonstrates the Government’s ongoing commitment to provide for high-quality public services and better societal outcomes in a manner that is consistent with the safe management of our public finances. It is another key milestone in our budgetary timetable, setting out our strategy for the year ahead and providing an outline of the resources that are available for budget 2025.

Total voted expenditure is set to grow by €6.9 billion, or 6.9%, to a gross voted expenditure ceiling of €105.4 billion. This increase is made up of a €5.5 billion, or 6.4%, uplift in total voted current expenditure and a €1.4 billion, or 10.6%, uplift in total voted capital expenditure. A key element of the overall expenditure amount for 2025 is agreement in relation to the level of health funding for 2025.

A key element of the overall expenditure amount for 2025 is agreement in relation to the level of health funding for next year. Taking into account demands for better quality healthcare, the complexity of providing health services, the legacy impact of a post pandemic and heightened inflationary environment, significant additional funding is being provided to the Department of Health. An additional €1.5 billion is being provided for health services this year, with a further €1.2 billion allocated for 2025 for existing level of service, ELS, costs. This additional funding has been agreed with the Minister for Health and the HSE and all parties have agreed it provides an opportunity to strengthen financial planning and governance within the HSE, recognising the importance of demonstrating the link between funding and the delivery of improved outcomes.

The €1.2 billion for health in 2025 forms part of an overall total settlement of €3.7 billion that will be made available to cover the costs associated with day-to-day spending. I have already referred to where we are with capital investment. In terms of new measures, the figure is €1.8 billion on budget day.

With regard to the Deputy's final question, I understand that the budget package that we have confirmed for 2025 still gives a general Government balance for next year of approximately €6 billion. That can be confirmed to the Deputy tomorrow evening at the Committee on Budgetary Oversight. I understand the Department of Finance will provide the general Government balance for the years after that when it has revised its tax forecasts, which it will do as part of the preparation for budget 2025.

Rose Conway-Walsh (Mayo, Sinn Fein)
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I look forward to the meeting of the Committee on Budgetary Oversight tomorrow evening. I am sure the Minister understands why we need the figures for the budget preparation.

I refer to what the Minister stated is provided for health. He is providing €1.5 billion in funding for the health service this year. That will be in the base for 2025, but the Government is then providing an existing level of service funding of €1.2 billion. For more than a year, Sinn Féin has rightly called out the Government's deliberate underfunding of the health service. That is something that was sharply criticised as well by both the Fiscal Advisory Council and the CEO of the HSE. The latter warned at the time of the last budget that it posed a significant punitive risk to the public and that has proven to be the case. Our claim that the health budget was a work of fiction, with damaging consequences for patients and staff, has been vindicated in this budget. Today's announcement shows the underfunding and mismanagement of the health budget. I welcome the fact that the Minister is putting it right, but it does prove the case that last year's budget was wrong for the health service.

Paschal Donohoe (Dublin Central, Fine Gael)
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Last year's budget represented the highest level of funding that has ever been provided to the Department of Health. At that point, more than €6 billion of additional funding was provided to it, compared with where we were in 2019. What has happened since is that the level of additional health expenditure in the first half of this year exceeded any expectations that I could have had. This was driven by a number of factors, not least of which has been the continued attendance of a high number of older patients in particular in emergency departments at a level that is now materially affecting the spending we have for health within the year.

I have many years of experience of managing the health budget with the Minister, Deputy Stephen Donnelly, and with previous Ministers for Health. We handled the health budget for last year no differently from how we handled it in any other year. What has happened however is the level of additional spending has been at a higher level for demographic and healthcare reasons. It is also due to control issues that we continue to have in the acute hospital sector. The framework that we have put in place offers the opportunity to deal with that.

Rose Conway-Walsh (Mayo, Sinn Fein)
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What has been announced today for the health service does not provide for any measures to increase capacity or improve services: it simply allows it to stand still. The capital budget outlined in the statement leaves the budget short by €1.5 billion, based on the targets of the national development plan, in terms of the 5% of GNI*.

Sinn Féin wanted to see a change of course on housing in response to the Housing Commission's report. The report called for a radical reset of housing policy, yet we do not see any additional capital there. I know the summer economic statement just provides the parameters for the budget. I accept that €8.3 billion overall sounds like a lot but less has been allocated for new measures. In last year's statement it was €2 billion compared with €1.8 billion this year. When we look at the size of the budget, a modest €12 increase to pensions cost more than €500 million. In the summer economic statement, the Government claims that it has been successful in addressing the impact of inflation in public infrastructure. I do not believe that to be the case.

Paschal Donohoe (Dublin Central, Fine Gael)
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Deputy Conway-Walsh made a call for more capital spending, more money for the health service and more money for social protection. They are just three of the items she listed. All of those would very considerably add to the size of the overall budget package, which already proposes spending growth of 6.9% compared with a year ago. The bigger the Deputy makes the package, in the way she proposes, the greater the risk that we begin to fund permanent increases in expenditure out of tax receipts that I am convinced will not be around forever, and we should not rely on them. That is a legitimate point of difference between the two of us. Deputy Conway-Walsh is obviously entitled to take a different view on whether the surplus we have is permanent. I do not believe it is, but if the Deputy goes down the path she proposes, my honest assessment is that she will be relying on day-to-day spending and baking into permanent expenditure money that will not be permanent. I strongly urge the House not to go down that path again.

As this is my final exchange of this priority question I hope the Acting Chair will indulge me when I thank the Deputy for her very gracious words on the passing of somebody who was a great gentleman, a wonderful parliamentarian and a great representative of Mayo. Due to my duties here this evening and tomorrow, I cannot attend the ceremony, but I greatly appreciate the words the Deputy offered.

Seán Canney (Galway East, Independent)
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We all agree with that. May he rest in peace.