€2.7bn extra for health in SES reveals fiction of 2024 Budget – Donohoe should make Dáil statement
- Fiction of 2024 Health Budget laid bare, with €1.5bn extra this year, and a further €1.2bn for 2025.
- SES commits less spending for new public services in 2025 compared to 2024.
- Time to abandon 5% spending rule which is only observed in the breach
Responding to the Summer Economic Statement, Labour Party Finance and Public Expenditure Spokesperson Ged Nash said it was clear that the Ministers wanted to give the impression of a giveaway pre-election budget but questioned if we can believe any of the proposed figures following the massive and unprecedented €2.7bn revision to health spending.
Deputy Nash said:
“Last year we highlighted that the Health budget was a fiction, and today’s Summer Economic Statement confirms that view with €1.5 billion extra committed this year to clean up the mess created by the Minister for Public Expenditure last October, and a pre-emptive €1.2 billion allocated for 2025 to sustain existing levels of service.
“Minister Donohoe needs to make a statement to the Dáil to explain how he got the figures so wrong in the first place.
What is provided for here is an extra €2.7 billion of health spending before any extra measures are announced in the Budget. A separate €1.2bn is provided for pay rises across the public services.
“When you drill into the headline figure of an €8.3 billion budget, it also quickly becomes clear that only €1.8 billion is committed for new public services and spending for 2025, when in 2024 the SES committed to €2 billion.
“That means less space to fund additional public services in health and housing, and nowhere near enough is committed to increase social welfare payments to meet the real cost of living.
“The €1.4bn in tax cuts is a substantial increase on what was proposed last year. In an economy at risk of overheating serious caution is needed when pumping more money into the economy. Meanwhile nearly a million people are going without the basics.
“It’s not clear either why the government committed to a self-imposed 5% spending rule if it never was prepared to stick to it.
“The SES underscores the urgent need for a strategic approach to Budget 2025. While our headline economic figures may look good on paper, ordinary workers and their families are still feeling the pinch from a sustained, permanent cost-of-living crisis. After Budget 2025, this rich country is still going to feel poor for so many.
“I do welcome the additional €1.4bn in capital allocation, but we will need clarification if this extra funding will deliver new projects or simply be absorbed by the increased costs of construction.
“Budget 2025 must focus on targeted investments in areas with the highest long-term benefits and biggest cost savings for families, such as housing, care, and climate transition. Yet remarkably, neither Minister has referenced the climate crisis in their introductory remarks to the SES.
“The Government’s current trajectory, which includes tax cuts alongside ill-defined spending plans, is a recipe for economic overheating and risk further exacerbating domestic cost pressures.
“We have seen to our cost that Ireland tends to spend what we have, when we have it, only to face severe repercussions when the economic tide turns or when sector-specific shocks occur.
“We must be strategic and we cannot afford for the Government to play fast and loose with public funds with no discernible plan.
“The people of Ireland deserve better than electioneering by a coalition government that seeks to bribe voters with their own money through tokenistic, one-off expenditures as happened in recent years. Such short-sighted measures will only serve to push up prices in the long run, exacerbating the very cost pressures we need to alleviate.
“From the Labour Party perspective, Budget 2025 must prioritise sustainable investments including a commitment to building a skilled workforce.
“Only through such measures can we ensure that Ireland’s economy is resilient and prepared for the serious challenges that lie ahead.”