Government spending will rise by more than 10 per cent next year when Budget day measures are added to the spending Estimates published yesterday. Presenting the Estimates, Minister for Finance Brian Cowen announced an 8.1 per cent increase in State expenditure.
More than a quarter of the €4 billion increase will go on public sector pay. However, spending plans worth several hundred millions of euro to help the elderly and those with learning disabilities have been held over until next month's Budget. These measures will take the overall increase in Government spending in election year to more than 10 per cent.
Mr Cowen insisted that his plans were "fiscally sustainable, economically appropriate and politically responsible" and illustrated the Government's "prudent management". Ignoring warnings from the Economic and Social Research Institute, Mr Cowen is to accelerate spending on roads, railways and other infrastructure, offering fellow Ministers €7.6 billion, up 13.6 per cent on last year.
Eight hundred more teachers will be hired, along with 1,400 extra special needs assistants and more nurses and gardaí in a further significant expansion of public sector staff numbers.
The National Roads Authority will get €1.8 billion to finish eight major roads projects and begin six more, and was on target to build motorways from Dublin to all major cities by 2010, he said.
The Department of Transport, which is to get money to pay for new rail lines, better rolling stock and buses for Bus Éireann, enjoys the biggest increase across all of the departments, up by 58 per cent to €780 million.
More than €14 billion will be spent on the health service next year, before Budget day increases, though the sum to be spent building new hospitals will fall marginally, as private investors come on board.
Labour deputy leader Liz McManus said the cut showed that Minister for Health Mary Harney was determined to rely "on tax-driven super-private clinics to plug the gap".
Local authorities will get €1,424 million to build council and low-cost housing, though they will get just 2 per cent more from the Local Government Fund to deal with their rising pay bill. The decision will create problems for councils to agree next year's budgets and raises the prospect of significantly higher commercial rates and bin collection charges in the new year.
The Garda's budget will jump 11 per cent, partly to fund national pay rises and the expansion in the force to 14,000 by the end of 2007, along with significant extra money for IT and communications equipment.
Ireland's Third World aid budget jumps to €814 million next year to meet the revised target to reach 0.5 per cent of gross national product by the end of next year - five times the sum spent in 1997.
More than €750 million will be spent on research and development under the Government's science, technology and innovation programme, up 15 per cent on last year, and nearly 2½ times the sum spent in 2001. However, the Health Service Executive, which has been given €360 million to refund illegally charged nursing home fees, will probably need extra money before the end of next year.
This year, the HSE had €340 million to deal with the problem, but only about €30 million of this will be paid to patients still living in nursing homes before December 31st because of administrative difficulties.
Though he acknowledged that the international economic climate could change, Mr Cowen said "the best forecasts" showed that the economy would grow by more than 5 per cent a year until 2008.
Fixed-price building contracts and better State management would cut costs, he said. The Government's bill for hiring consultants is also falling dramatically following his edict that fewer of them should be hired.
Fine Gael's deputy leader, Richard Bruton said the Estimates once again showed that the Government was failing to get value for money for taxpayers, who, he warned, would pay an extra €1 billion in "hidden taxes" next year.
Green Party TD Dan Boyle said Mr Cowen was attempting "to portray himself as a friend of the disadvantaged and deprived, in contrast to the approach adopted by his predecessor Charlie McCreevy".
