Minister of Finance Brian Cowen

The Minister for Finance, Brian Cowen, TD, in presenting the Government’s pre-Budget 2007 spending plans said that: “we have an economy that is working and a country that is at work. From being one of the developed world’s worst economies twenty years ago, we now have a model of excellence and a performance which is the envy of much of the developed world.

Over the course of the past decade, the combination of this Government’s sound policies and the hard work of Irish people has transformed our country. We have enjoyed a quantum leap in terms of our performance and over the last decade we have achieved:

• an economy that has grown at an annual average rate of over 7 per cent between 1997 and 2005.

• Our debt/GDP ratio has declined from 65 per cent in 1997 to 27½ per cent of GDP in 2005. This debt-to-GDP ratio puts us at the second lowest in the euro area.

• The level of employment this year exceeded 2 million for the first time in the history of the State.

• Unemployment has fallen dramatically from 10 per cent in 1997 to around 4¼ per cent today with long term unemployment of just 1.4 per cent. Ireland's unemployment rate is one of the lowest in the EU.

• We have created a Pension Reserve Fund which as of 30 September 2006 was valued at over €17.6 billion.”

Government’s spending priorities

The Minister announced a pre-Budget spending increase of just over €4 billion funding for public services in 2007, of which over €3 billion is for spending on day-to-day services and almost €1 billion on capital services. This will bring overall pre-Budget spending in 2007 to just over €54 billion, almost €149 million each day next year.

The main pre-Budget allocations on spending on day-to-day services are:

• Over € 14 billion on health – an increase of 11% when account is taken of the expected outturn on planned expenditure this year. The Minister said that he will announce further increases in expenditure in the health area on Budget day;

• Almost €8 billion on our education services – an increase of 7.7%;

• Almost €14 billion on social welfare. The Minister will be making separate provision for increases in social welfare payment rates on Budget day.

The Health allocation includes around €179 million for service improvements including for care of the elderly; education & training of health professionals; the National Treatment Purchase Fund; the ongoing establishment of primary care teams, new units in the acute care area including new units/facilities in acute hospitals and a further roll-out of the Breastcheck programme.

Included in the 2007 allocation for Education is €288 million to meet the cost of service improvements in a number of key areas, including 800 additional teachers in 2007, which will bring to almost 1,900 the number of new teachers provided since 2005 to reduce class size and help tackle problems of disability and disadvantage;

New initiatives and expansions of existing services in a range of areas in accordance with commitments given under “Towards 2016” such as language support, Youthreach, and adult literacy and quality enhancement in the Post-Leaving Certificate sector; and significant increases across a range of other programme areas including capitation grants for schools, educational inclusion and school transport.

At third level, significant additional funding for the Strategic Innovation Fund and for education expenditure under the Strategy for Science Technology & Innovation is also included.

The Minister also provided almost €1.4 billion for the Agriculture sector, an increase of €116 million. This increase reflects the first year’s funding for the package of Rural Development Measures recently negotiated as part of “Towards 2016”.

Cowen also announced that in line with the Government’s commitment to reaching the target of 0.7% of Gross National Product by 2012 he is providing for a total commitment of €814 million for Overseas Development Aid in 2007 which meets the interim target of 0.5% of GNP by 2007. This represents an increase of 21% on the 2006 allocation of €675 million.

Spending on garda resources in 2007 will increase by over 10 per cent to nearly €1.4 billion. This reflects the Government’s commitment to expand the Force to a record complement of 14,000. He said that “It is important that we provide these extra resources to help the Gardaí to tackle crime”.

As regards the Capital Programme, the Minister said that on a pre-Budget basis total Exchequer cash spend on investment will be almost €7.6 billion next year. This will be spent on helping to complete the inter-urban motorway system by 2010; a major investment in the public transport programme; meeting the Government’s commitments for more social and affordable housing under the Towards 2016 Agreement; new schools, refurbished schools, hospital improvements and more care for the elderly facilities. Many other capital projects in these and other departments will also be progressed next year as a result of this record allocation. Cowen said: “We have to continue to build up the country if we are to maintain the present high employment levels and improve the quality of life for our citizens”.

Department of Finance, Merrion Street, Dublin

Cowen concluded by saying that:

These estimates are fiscally sustainable, economically appropriate and politically responsible. The economy is at full employment and growing at its potential. None of us want to go back to the bad old days of reckless budgetary management, high borrowing and punitive taxation. Prudent management works. Maintaining stability has been the cornerstone of our economic success.

Stability and sensible policies have enabled us to generate the resources necessary to tackle poverty and social inequalities and to improve public services. A better society can only be built on the basis of a strong economy. By protecting our economy, we will protect our spending programmes. These spending programmes are making a vital difference to people’s lives, now and over the years ahead.

Today’s Estimates will lead to improved public services and better infrastructure not only in 2007 but in the years ahead. They are sustainable, targeted and appropriate as we work to build a stronger and fairer Ireland.”

Martin welcomes Estimates that "promote employment growth and protect employment rights"

The Minister for Enterprise, Trade and Employment, Micheál Martin T.D.,  welcomed the allocation of additional funding for his Department in the 2007 Estimates.

The 2007 Estimate for the Department of Enterprise, Trade and Employment totals €1,858 million (gross). The 2007 Estimate represents an increase of €112.1 million (6%) on the 2006 allocation.  Exchequer spending will increase by €75.3 million (5%), while spending from the National Training Fund will increase by €36.8 million (10%).

 Commenting on the Estimates for his Department, the Minister said: “ I am pleased that significant provision has been made for priority areas within my Department to sustain our economic and employment growth”.

€289 million spending on Science and Technology Programme in 2007

Funding for Science, Technology and Innovation programmes Department’s Estimate for 2007 will amount to €289.7 million.  This represents a €31 million (12%) increase on the 2006 allocation. 

Commenting on the increase, Martin said “The increased funding reflects the Government’s commitment to the research and development agenda, as outlined in the Strategy for Science Technology and Innovation 2006-2013 which was launched in June.” 

“The Strategy will see Ireland secure its position as one of the most advanced knowledge economies in the world and become renowned for the excellence of its research.  It will put the benefits and opportunities of science, technology and innovation at the heart of Irish economic and social development, grow our enterprise sector in a sustainable manner, and facilitate social advancement.”

“Since 1997, we have put in place the agencies, programmes and funding required to ensure that Ireland achieves and sustains excellence in research,” Minister Martin said.  "By advancing Ireland's knowledge economy we will deliver world class people and enterprises with the drive and resources to succeed in a tough global environment.”

€11m extra for Enterprise Agencies

The enterprise development agencies will continue to provide a range of grants to companies to promote the growth of indigenous industry and encourage inward investment.

The Minister said “IDA Ireland’s grants to industry programme will increase by €11 million (13%) in 2007, reinforcing the excellent progress which has been made in 2006 in attracting new investors to Ireland. 

“In addition to the funding Enterprise Ireland will receive under the Science Strategy, that agency’s 2007 allocation for its more traditional grants to industry is broadly in line with the estimate the 2006, at €57.2 million (including National Training Fund support for in-company training).”

Both IDA Ireland and Enterprise Ireland will also use own resource income to complement the Exchequer allocations for their grant-funded activities.

The Minister added: “The City and County Enterprise Boards also play an important role in supporting start-up enterprises.  In this context, they have a key role to play in supporting the recommendations in the Report of the Small Business Forum.  Funding for the Enterprise Boards will increase by 5% in 2007, to €31.8 million.  I will also be exploring ways of re-directing additional funding to the Enterprise Boards specifically to address recommendations in the Report of the Small Business Forum

€5 million for new initiatives to help Small Business

€5 million will be invested in 3 new initiatives for the small business sector .The new initiatives are :

• Knowledge Acquisition Grants scheme
• Innovation Vouchers scheme
• ICT Audits programme

The Minister said “As I indicated at the launch of the Small Business Forum I am committed to the implementation of the recommendations to the maximum extent possible. 

€392.4 Million for the National Training Fund

Further underpinning the drive towards a knowledge economy, expenditure from the National Training Fund in 2007 will amount to €392.4 million, an increase of €36.8 million (10%) on the 2006 Estimate. 

Martin said: “To achieve the vision of a knowledge-based, innovation-driven economy we need also to place a strong focus on the training and up-skilling of our workforce.  The increase in allocations from the National Training Fund for 2007 reflects my Department’s commitment to the promotion of lifelong learning as a means of underpinning the development of a knowledge-based economy. It also supports recommendations on up-skilling made in the Enterprise Strategy Group report.”

An emphasis will continue to be placed on supporting in-company training by providing additional funding to Skillnets and FAS’s One Step Up programme.  Skillnets’ Training Networks Programme will receive an additional €7.2 million in 2007, an increase of 59% on 2006. 

€15 million increase for Apprenticeship Programmes

The Minister also announced a €15 million increase from the National Training Fund to meet demand in the Apprenticeship programme.  The Minister said, “Since 2002, Apprenticeship registrations have risen by 20%.  The increased allocation of €15 million from the National Training Fund in 2007 will alleviate existing pressures and allow entry waiting times to FAS apprenticeship courses to be reduced significantly.”

Combined with a 7% increase in Exchequer funding for FAS’s Training and Integration Supports, a total of €476.3 million will be available in 2007 for upskilling people in, and for, employment. 

€386 million for Long Term Unemployed Programmes.

In addition, the Exchequer will make a contribution of just under €386 million to FAS Employment Programmes aimed primarily at long-term unemployed people and other marginalised groups.

People with Disabilities

FAS’s funding for Training and Integration Supports includes an allocation of €72 million for programmes designed to enhance the employment of people with disabilities (up 6% from €67.7 million in 2006).  The allocation includes €10.5 million for the Wage Subsidy Scheme which was launched in 2005.

The Minister said: “Achieving higher levels of employment for people with disabilities has been a key objective of my Department and of FAS for a number of years.  I am pleased that we have been able to secure additional funding to continue to promote the employment of people with disabilities next year.” 

“In addition to the funding provided to FAS to deliver programmes for people with disabilities, my Department and its agencies will spend a further €11.6 million in directly employing people with disabilities and in making their premises and services more accessible in accordance with the Disability Act.  This will bring the total budget for disability services in my Department’s Estimate to €83.6 million, compared to €78.8 million in 2006.”

Workplace Basic Education Fund.

This Fund, which is aimed at improving literacy and numeracy skills in the workplace, is being increased by just over €1 million from the National Training Fund, to €3.046 million.

15% increase for Consumer Agency

Martin also announced a further increase in funding for consumer advocacy and protection in 2007, with a €1.1 million (15%) expansion in funding for the National Consumer Agency. This is a 147% increase since 2004 when the allocation was €3.4million.

“The allocation for consumer issues in 2007 will amount to just under €8.4 million,” the Minister said.  “This additional funding will allow the new Consumer Agency to continue to establish itself as a forceful advocate for the consumer and to ensure that the consumer's voice is heard.”  

The Agency will have additional powers and will focus in areas such as advocacy, research, enforcement, education and awareness.

Over 70% increase in Employment Rights Funding

An additional   sum of €11.2 million is being made available in 2007 to support employment rights. The Minister said, “The establishment of the Office of the Director for Employment Rights Compliance is a key part of the new Social Partnership Agreement, Towards 2016.   The 2007 Estimate provision will provide for a trebling of the number of Labour Inspectors under this Office to 90 by the end of 2007 and for associated legal, accounting and administrative support.”

“This is just one part of a major package of employment rights measures in my Department’s Estimate for 2007.  The package also includes additional staff and funding for the Labour Court, the Employment Appeals Tribunal and the Rights Commissioners Service in the Labour Relations Commission”.

The Minister added, “The new Employment Rights compliance model will inform people of their entitlements and provide simpler redress systems, coupled with stronger enforcement and increased penalties for non-compliance.  The significant increase in funding in this area in 2007 demonstrates the Government’s determination to protect the rights of workers”.