PUBLIC SPENDING rose to over 40 per cent of Gross National Product (GNP) last year for the first time since Fianna Fáil-led coalitions came to power in 1997, according to new figures released by the Department of Finance.
With current expenditure increasing from €52.5 billion in 2007 to €55.8 billion in 2008 – and with a commensurate dramatic fall in State revenues – the result was a significant increase in the percentage of GNP accounted for by public spending.
The departmental figures show that public spending was 36.5 per cent of GNP in 2007, but rose to 40.6 per cent in 2008.
Fine Gael enterprise spokesman Leo Varadkar, who obtained the information by way of a parliamentary question, said public spending in Ireland was now at the OECD average, and above the OECD average for health and social welfare.
The breakdown for individual departments shows that health now accounts for 9.8 per cent of GNP compared to 5.7 per cent when the Fianna Fáil-led Coalition returned to power in 2007.
He said, with the economic downturn set to continue in 2008, it now looked probable that public spending would increase to 43 per cent of GNP, well above the OECD average. These figures disproved the claim that Ireland’s public spending was relatively low compared to other European countries.
“If you look at health spending, it is now almost 10 per cent of GNP, which is almost the same as Britain and the Netherlands. But both countries have universal healthcare of a much higher standard than Ireland has.”
Mr Varadkar said the “old argument” that Ireland’s public spending was low was disproved by the figures. “The truth is that we have a high-spend and low-tax economy that is unsustainable.”