Part II - Expenditure Allocations 2018-20 - Budget

1 31 part II - Expenditure Allocations 2018-20 32 Chapter 1 Expenditure Aggregates This part of the Expenditure Report sets out the Expenditure Allocations decided by Government as part of Budget 2018, consistent with Ireland s fiscal framework. The following pages look at the summary position across all Departments, taking into account the pre- Budget position for the expected level of Exchequer Receipts and Payments in 2017 and 2018 as provided in the recently published Government White The subsequent sections look in turn at each Department individually, setting out its multi-annual budgetary Allocations , the 2018 spending plans, and new Budget measures.

2 Expenditure Allocations 2018 - 2020 For 2018, spending by Departments will amount to billion as shown in Table 2 below. This represents a year-on-year increase of The revised ceilings for 2017 set out below reflect transfers of functions between Departments and the establishment of the Department of Rural and Community Development. Also included are increases in Expenditure in relation to the discontinuance and refunding of water charges and a provision for a Social Welfare Christmas Bonus. Table 2 Gross Voted Expenditure 2018 2017 2018 Change million million million % Gross Current Expenditure (Excl.)

3 One-off Expenditure ) 53,776 55,593 1,817 One-off Expenditure 179 (179) - Gross Current Expenditure 53,955 55,593 1,638 Gross Capital Expenditure 4,540 5,330 790 Total Gross Expenditure 58,496 60,923 2,428 *Rounding affects total Current Expenditure Allocations 2018 Table 2 above shows how the 2018 gross current Expenditure amount of billion is allocated across Departments. Details of the 2018 current Expenditure plans for each Department are set out later in this part of the Expenditure Report at Sections to Current Expenditure in 2018 is estimated to be billion, or higher than 2017.

4 13 Department of Finance (October 2017), Estimates of Receipts and Expenditure for the Year Ending 31 December 2018, Dublin. 33 Restatement of Estimates for Comparative Purposes In order to assist with comparing Departmental Expenditure in 2018 with the current year, Table 3 below outlines the impact on Departmental Allocations of transfers of functions agreed by Government between Departments and additional funding of 293 million arising in 2017 as a consequence of the Water Services Bill 2017.

5 These adjustments are reflected in Further Revised Estimates to be presented to D il ireann. In addition the Table includes a transfer from the Department of Employment Affairs and Social Protection to the Department of Rural and Community Development in respect of the Community Services Programme. Table 3 Transfer of Functions (Excluding Water and Additional Rural Resources) Estimates 2017 Current Adj. Adjusted 2017 Current Estimates 2017 Capital Adj. Adjusted 2017 Capital million million million million million million Agriculture, Food and the Marine 1,230 0 1,230 238 0 238 Business, Enterprise and Innovation 303 (2) 302 555 0 555 Children and Youth Affairs 1,285 0 1,285 26 0 26 Communications, Climate Action and Environment 357 0 357 171 0 171 Culture, Heritage & the Gaeltacht 250 (13) 237 119 (67) 51 Defence 847 0 847 74 0 74 Education and Skills 8,844 0 8,844 693 0 693 Employment Affairs and Social Protection 19,844 (44)

6 19,799 10 0 10 Finance 439 0 439 25 0 25 Foreign Affairs and Trade 704 0 704 11 0 11 Health 14,152 0 14,152 454 0 454 Housing, Planning & Local Government* 1,075 47 1,122 705 (11) 694 Justice and Equality 2,392 (4) 2,388 180 0 180 Public Expenditure and Reform 943 0 943 151 0 151 Rural and Community Development 0 132 132 0 77 77 Taoiseach 182 0 182 0 0 0 Transport, Tourism and Sport 680 680 1,130 1,130 Total (Excl One-off Costs) 53,531 53,646 4,541 4,540 One-off cost Water refunds* 179 Gross Expenditure 53,531 294 53,825 4,541 (1) 4,540 *Rounding affects total 34 Policy decisions impacting on 2017 Expenditure The Water Services Bill 2017 provides the mechanism through which the majority of the recommendations of the report of the Joint Oireachtas Committee on the Future Funding of Domestic Water Services can be introduced.

7 This includes both the discontinuance of domestic water charges and the extinguishing of any existing liabilities for water charges for domestic customers, for the period prior to the suspension of charges in 2016. 125 million was already provided in the 2017 Estimate for the Department of Housing, Planning and Local Government in respect of the suspension of domestic water charges to the end of March 2017. A further 114 million is required in 2017 to meet Irish Water s funding requirement arising from the loss of revenue from water charges.

8 This amount does not give rise to additional General Government Expenditure in 2017 as Irish Water's full costs for the year were included in the Budget 2017 fiscal projections. The cost of issuing refunds to customers in respect of domestic water charges paid is estimated to be approximately 179m, including administration costs. This is a one-off cost arising from the Oireachtas decision in relation to water charges. Table 4 below includes a provision of 230 million in respect of a Christmas Bonus for long-term Social Welfare recipients which will be funded from both the Exchequer and the Social Insurance Fund, with the extent of any required supplementary estimate to make provision for this bonus from determined later in the year.

9 At the end of September, PRSI receipts were 220 million ahead of the level estimated at Budget -time last year and it is currently projected that PRSI receipts for the year will be almost 270 million (or per cent) ahead of profile. Taking account of the higher than forecast surplus on the Social Insurance Fund, and year-end underspends it is anticipated that the additional funding impact on Expenditure can be broadly accommodated within the overall available fiscal resources without impacting on the delivery on public services.

10 Current Expenditure Allocations 2018 The unemployment rate in 2018 is estimated at per cent. The average unemployment rate has not reduced to a similar level since 1999, when it reached a rate of per cent. That year, the increase in voted current Expenditure was just under 10%. In contrast, the overall increase in current Expenditure next year is just over 3 per cent, excluding the impact of one-off items. This reflects the Government s commitment to sustainably increase Expenditure while delivering on key priorities.