Target for overseas aid spending 'unsustainable'

THE LEVEL of Irish overseas aid cannot be increased to UN recommended targets without making big cuts in public spending elsewhere, the Department of Finance has warned.

Officials have told Minister for Finance Michael Noonan the Government’s target of spending 0.7 per cent of gross national product on overseas aid was “unsustainable in the current circumstances”.

The only way the target could be achieved was by making “major adjustments” elsewhere in the next budget, according to a briefing note for Mr Noonan.

It points out that overseas aid spending was set at €670 million in the last year, or 0.52 per cent of GNP. To increase it to the 0.7 per cent UN target would cost an additional €230 million to €319 million depending on when the target was reached.

The document also says the size of the Defence Forces may have to be cut more drastically than originally anticipated. The Government has already agreed to reduce the size of the Defence Forces from 10,500 to 10,000 to cut expenditure.

However, the implication of further savings required in the area is that serving numbers will reduce to 9,500.

The document says the Department of Finance accepts the strong case for buying two new Naval Service vessels.