Richard Boyd Barrett: Levies, Education Cash and Housing Cuts

You can come back in if you want to. So just to clarify then, because the government has now allocated an extra £640 million next year to the Department of Education, for this year there's going to be a levy on all other government departments next year? Is that what you've just told us? And that's a decision taken this morning? Yes. Okay. And so there's going to be less money for housing next year because there's more money for special needs this year? A couple of points, Deputy. So the levy is £446, okay? The levy is? It's £446 million. Across all departments in 2027? Except education. Except what? The Department of Education. Okay. £446 million in 2027. And the Department of Education, so effectively the total ceiling for next year in 2027 is increasing from £118.5 billion this year to £125.5 billion in 2027. So the total amount to be allocated next year is effectively £7 billion on top of this year's ceiling. That is more or less for existing service levels though, is it? But the way we present the numbers effectively, and we changed this in the last budget, Deputy, to effectively we moved away from this idea of existing service levels. What we're trying to get to is focus on reforms and efficiencies. If you don't mind me saying so, I doubt that those who need the services would see it that I mean, like, a lot of the increase in the amount of money available that would be there, the £118 to the £125 from this year to next year, a lot of that, maybe even all of it, would be demographics and to account for demographics and ensuring that service levels don't fall. Isn't that right? So when we looked, so previously we had an ELS model of presentation, and when we looked at that, it wasn't being consistently defined or applied across departments or over time. It embedded efficiencies into the system by building previous overruns into the base. It focused attention on a very small marginal portion of the budget rather than the total level of resources that we're investing across the country, and it provides little insight into the outputs, outcomes, or value for money that you're talking about. It didn't support a meaningful trade-off analysis between or within sectors, and when we presented the budget last year, we presented a new approach to reflect what is being delivered, not just how much is being spent. We tried to emphasise reform and efficiency, we centred on policy impact, service levels and population need, and we were trying to improve the transparency on the composition of the total expenditure. Sure, but it's difficult to, if you don't mind me saying so, it's difficult to see how there being a levy and less money available, say in housing next year, is going to do anything other than curtail investment in addressing the housing crisis. Deputy, just to clarify, in designing the levy, the priority has been to protect a number of essential areas, that includes safeguarding capital spending to address our infrastructure gaps and to ensure we can continue to deliver the national development plan, preserving social protection and social housing supports to ensure a strong social safety net for those who need it, and to minimise the impact on frontline services, particularly in areas of health, justice and disability. The levy is designed to protect certain areas, and it's also designed to ensure efficiencies can be delivered in other areas across, you know, the totality of the expenditure. I get you, I get you, but still, squaring that circle could, you know, smacks a little bit of austerity to me, but anyway, what about the billion contingency fund, I mean, why is that, why is the extra money going to education, not coming out of the contingency fund, rather than coming out of the levies that are going to be imposed on other departments next year? So, the contingency fund, so the overall expenditure ceiling for 2026 obviously includes a one billion provision for a contingency reserve to address potential expenditure on events and in-year expenditure pressures. Obviously that's in line with international best practice, with what the IMF has recommended. That's to bring in more of these supplementary budgets all the time. So obviously, there were costs allocated from the contingency reserve in 2026, so the EU presidency, which is now 0.3 billion, and there was an additional payday of 0.5 billion effectively were funded from the reserve as part of the revised estimates allocation. So what, if the amount the Department of Education has gotten, they've gotten 200 million from the contingency and the remainder is applied to the levy. So 200 million from the contingency and the rest for the levy. Am I right in saying that the money that's coming in from the increase in the corporate tax rate from 12.5 to 15% has turned out, despite what the government said, some of us said different, it has been a big boon, right, that the government predicted that increasing the corporate tax rate was going to lead to less corporate tax coming in. Some of us said, and did the fiscal advisory, said that it would lead to more, and there's like about 5 billion actually extra coming in now, isn't it, because the department was predicting minus 2 billion, but actually it looks like it's going to be plus 3 billion as a result of raising the corporate tax level to 15%. I mean, does that mean we have a much bigger budget surplus, but the government has decided to levy departments next year to cover additional spending in education, rather than actually use some of a surplus that they didn't even predict? I mean, am I right? Because they didn't predict this, but it's now forecast. Thank you, Deputy. The tax and revenue forecast are now for the Department of Finance, and I suppose what we do have is we have government policy that's clearly articulated the government's ceiling over the medium term, so that ceiling is due to increase with a moderate level of expenditure, effectively it'll moderate over the medium term, but there'll be substantial increases, I think the figure I've used is that it'll grow from 118.5 billion this year to 125.5 billion next year, even with the increase in the ceiling for the Department of Education. Can I just ask, I know I'm just slightly over time, can you just remind me, what is the surplus projected for? I don't have the surplus figures, obviously. This year it's 5 billion, I think. It's going to increase from 6 to 9, after this one, I think. 6 to 9 surplus? Yeah, it was 5.8, like you said. I think you'll have to increase it to 9. And that doesn't include, sure it doesn't, the surplus doesn't include money from things like PRSI and property tax or various things, am I right? Deputy, you'd have to ask the Department of Finance. Okay, that's finance, that's more finance. Okay, thank you very much.