Minister Donohoe publishes Mid-Year Expenditure Report 2019

17th July, 2019

The Minister for Finance and Public Expenditure & Reform, Paschal Donohoe TD, has today (Wednesday) published the Mid-Year Expenditure Report (MYER) for 2019. The Report, along with the National Economic Dialogue and the Summer Economic Statement (SES), is an integral part of the reformed Budget process.

The MYER sets out the opening pre-Budget position for 2020, consistent with the budgetary parameters in both the Stability Programme Update, published in April this year, and also the SES. The SES outlined two scenarios for Budget 2020: Scenario A, an orderly Brexit at the end of 2020, and Scenario B, a disorderly Brexit at the end of October this year. The Government will decide in September which is the more likely scenario.

The overall fiscal parameters outlined in the SES in respect of Scenario A, and the related expenditure amounts set out in the MYER, also form the starting point for Scenario B. However, as outlined in the MYER there would be requirements for additional expenditure in the event of a disorderly Brexit, as the automatic stabilisers take effect with additional income supports, and temporary targeted support for the sectors most affected.

The Government’s budgetary strategy is focused on ensuring that steady increases in public expenditure that are affordable both today and into the future.  As outlined in the MYER, this strategy requires that the expenditure policy framework ensures consistent evaluation of the effectiveness of existing expenditure alongside sustainable levels of expenditure growth.

The Spending Review is a key element of the budgetary framework that can assist in how Government spending is allocated and maintained. The Spending Review 2019 represents the third cycle in this series of rolling, selective reviews. It is expected that over €40 billion of Government spending will have been reviewed over the three years of the process. These reviews assist in shifting the emphasis away from the incremental increases in expenditure each year, by examining baseline Government expenditure as a whole.

This is the third and final year in the current round of Spending Reviews. Having published 50 papers over the last two years, further papers covering a broad range of policy areas are to be published in the coming weeks. Additional spending review analyses will also be published alongside the Budget in October.

As the current process is in the final year, Professor John O’Hagan, Adjunct Professor of Economics in TCD, is undertaking an independent review of the process. This review will assess how the Spending Review process has achieved its key objectives and, where appropriate, will provide recommendations and actions on how the process can be improved in future.

Minister Donohoe said: ‘Following the significant expenditure reductions implemented over the crisis period, Government has prioritised public spending in order to support economic growth and the wellbeing of citizens. As we deal with uncertainty in the external environment it is important that we continue to enhance the resilience and growth capacity of the economy. The steady and moderate increases in public spending implemented in recent years, with a particular focus on frontline services and capital investment, place us in a better position to respond to the coming challenges. To ensure sustainability into the future this strategy is supported by ongoing budgetary reforms, such as Performance and Equality Budgeting and the Spending Review process, which enhance decision making and transparency.’