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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Budget priorities and departmental overspends

Summary

Nash promotes Labour’s alternative budget, focused on energy costs, incomes and child poverty, and criticises Government budgeting for understating departmental needs. The Tánaiste welcomes debate but argues that higher spending must be accompanied by reform rather than automatic additional funding.

We are days away from the announcement of budget 2027 and it looks like everything will be leaked in advance, or will the Tánaiste be able to keep a few morsels in his back pocket for budget day? Later today, the Labour Party will publish its alternative budget. We will set out our plans for a future we can all afford. To take on the cost-of-living crisis, our plan is unapologetically and relentlessly focused on three key issues: energy, incomes and child poverty. By taxing wealth sensibly and putting windfall taxes on soaring energy and bank profits, it shows how we can widen and deepen the tax base, and that we can build better public services and support the PAYE workers and households that Fine Gael and Fianna Fáil left behind last year. It also shows that Ireland can afford to provide targeted energy credits worth €400 to over 1.2 million homes that need them, that as a country that remembers what it was to be poor, we can afford a second targeted rate of child benefit and, as a wealthy and highly unequal economy, we can afford to increase social welfare payments by €15 a week, increase public sector pay and index income tax to help workers.

I do not need to tell the Tánaiste that people across the country are worried sick about how they will pay the bills this winter as grocery and energy prices rise higher and higher, and as the Government puts up the cost of public transport. When people read the news today, however, they will also be angry. They will be angry about the waste of public money outlined in the report from the Comptroller and Auditor General covering 2025. We can take our pick of the issues uncovered across Departments and agencies by the Comptroller and Auditor General.

We need to know what the Government is doing about irresponsible spending and how it will budget effectively and responsibly for next year and beyond. Last year, a €600 million hole was left in the budget of the Department of education, but there is also a growing overspend in the Department of Health of close to €1 billion. Can we expect there to be cuts of that magnitude next year to the budgets of other Departments to protect essential healthcare, or will the Government, like we do, present honest, fully funded budgets?

The publication of existing level of service, ELS, estimates from the Parliamentary Budget Office yesterday shines a light on the dilemma and realities faced by the Government. It reckons that when all the known demands on the available pot of money are factored in for new spending, just €1 billion would be left next year for new measures, new public services and new innovations. That money will be to cover the promises that the Tánaiste and his colleagues have already made on childcare, the cost of disability, carers, education and so on. That €1 billion is also about the same size as the predicted health overspend. How is the Government going to fund it all? Will there be up to €1 billion of cuts in other Departments next year to fund overspends in health, or will the Government be responsible and increase taxes on wealth to fund the scale of public services and income supports our country needs?

Comment on this
A Deputy

Hear, hear.

Comment on this
Simon Harris The Tánaiste Fine Gael

I thank the Deputy very much. There is certainly no fear of Labour's alternative budget being leaked anyway. I look forward to it being published later this afternoon and having a chance to read it and engage constructively on it in the time ahead. At the outset, let me say that while we will all come at this from different perspectives and points of view, I do not doubt that every party in this House, Government and Opposition will be endeavouring to explore ways in which we can all assist people with the cost-of-living challenges. I share the view that one of the largest challenges families, businesses, farmers, households and the country in general face is the energy situation.

There is a balance that we have got to get right here between helping people in the here and now and helping to accelerate the transition. In fairness to the Deputy's party, I know it is taking this seriously, and we have to take it seriously. We need to help people in the here and now, but we also need to see how we can assist people who are genuinely full of common sense and trying to do the right thing by their own families, businesses and farms, but need us, as the Government, to make sure that grants and other means can help to bridge the gap and make that a viable proposition for them. We saw some measures in that space this week from the Minister, Deputy Darragh O'Brien. I think 11 more measures were announced around sustainable energy grants, such as a boiler scrappage scheme. We need to build on this in the time ahead.

In relation to the issue of the health service, I know well that there is a demand. It is a demand-led service and there are legitimate pressure points that occur throughout the year. Demands can also come from the Government and the Opposition sometimes to purchase new drugs or buy new things, and these are legitimate things that can happen outside the budgetary cycle. The Minister for Health and the Minister for public expenditure and reform are working very closely on making sure we have an adequately funded budget, as well as a realisation across the health service that budgets matter too. Good work is going on in relation to that.

I will look at Labour's proposals in relation to what it means by taxing wealth. I do not mean that glibly. We do not have enough conversations in this House about how we grow the wealth of our country so we can take in more revenue and then divide it up across our people. I would never wish to do anything and neither, I believe, would the Deputy, that would have any sort of chilling effect on enterprise or investment in our country.

Turning to the broader point the Deputy made, making sure we get value for money for taxpayers is an important one. We are in a rare position as a country of being able to deliver a budget next week that will see us being able to reduce some taxes, including taxes on work, and that is serious about sitting down with our public service unions and negotiating a new public sector pay deal because work must always pay, including work in the public service. We also aim to increase public expenditure. When governments across the European Union are not in a position to be able to do those things, there is an even greater responsibility on us to make sure there is delivery, outputs and outcomes from that additional level of investment. The budget, in all its parts, will be delivered to the Oireachtas next Tuesday. I look forward to debating its contents with the Deputy then.

Comment on this

We will have overspends in health this year. We have had overspends in education this year, and we will have overspends in other Departments as well. The principal reason for the overspends in health and some other key spending Departments is that this Government and its immediate predecessor decided to engage in fictional, fraudulent budgeting.

I will give an example. Last year, the Minister for education made it very clear to the Department of public expenditure that she was at least €600 million short in respect of the special education services and transport services that her Department needed to provide. There was an understanding this time last year with the Department of public expenditure that it would be back knocking on the door this year and, lo and behold, €600 million plus was delivered this year. That is no way to manage an economy, no way to run a country and no way to run public services.

It is beyond time that we had an honest debate in this House about tax and spending and the real challenges we face as a country. We have not had that and we will not have it next week. What we will have next week is another effort at a budget that will involve a little bit here and there for everyone. That is not sufficient for an economy of this scale and a society that has the ambitions we have. We need that honest debate and we need honest budgeting.

Comment on this
Simon Harris The Tánaiste Fine Gael

I love honest debate and I welcome it. I look forward to honest, robust debate on our proposals and Labour's proposals in a constructive spirit to try to get the best outcome for the people that we are all elected to serve. I will make the point that just because the Department says it needs more, does not mean that a Government should say "Grand, here is another cheque".

Comment on this

It does, though.

Comment on this
Simon Harris The Tánaiste Fine Gael

We have got to a level of public spending now, and I do not mean this smartly, that was almost unimaginable when the Deputy's party was in government. We are at a level of public spending now that does merit the question. It is one thing to ask people to do more with less, but it is quite another thing to ask State agencies and Departments to try to do more with more. I do not buy into the idea, and I am not saying that the Deputy does either, that every challenge in the public service can be addressed with another cheque and more funding. We do have to ask how we can reform things.

If we look at what the Minister, Deputy Carroll MacNeill, is doing, to take the example of the health service, that is exactly what we should be seeing from Ministers. It is that we are willing to negotiate new contracts but there will be a need to reform the way people work and hospitals will have to function as busily on a Saturday as they do on a Thursday. That is the sort of ambition we need for the health service. We will have a chance to debate the detail of all of this at great length and appropriately so from next Tuesday.

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