Donnelly makes ‘no apologies’ for spending on healthcare amid budget tensions

Minister calls for ‘honest conversation’ about overspend and defended ‘significant investment’

Minister for Health Stephen Donnelly has said an “honest conversation” is needed about healthcare budgets and overspending, saying he makes “no apologies” for investing in the area.

“We need to provision for the reality of healthcare, we need to provision for how much healthcare actually costs,” he said on his way into Cabinet.

He rejected the suggestion that Ireland spends more per person on healthcare than comparable economies, saying the country is ninth of EU spending on healthcare.

“We spend about average, we have spent around average for a long time. We haven’t invested in our hospitals the way we should have, we haven’t invested in the number of consultants in the way we should have, we haven’t invested in the number of hospital beds the way we should have.


“I make no apologies and this Government makes no apologies for a significant investment in healthcare over the last three years,” Mr Donnelly said, arguing 1,000 new beds were added alongside 22,000 more healthcare professionals.

When it comes to the overspend, the Minister said there was also a need for an “honest conversation” there, arguing it was driven by three parts – including spending in the acute hospitals which needs to be “much better controlled”.

“That’s only one part – the second part is inflation,” he said, which was more than 20 per cent in healthcare. The third part, he said, was demand. “An honest appraisal would say more people being treated by our health service requires more funding” alongside the increased cost of medicines.

The was a need to provide for how much healthcare costs “whilst being deadly serious about better controls around hospital spending”, he said.

The health budget – specifically an overrun of €1.1 billion for this year – has become the defining conflict of pre-budget negotiations between line Ministers and Minister for Finance Michael McGrath and Minister for Public Expenditure Paschal Donohoe.

Talks between the pair and Mr Donnelly have seen the health side focus on the inflationary pressures the HSE is facing, as well as higher levels of demand within hospitals.

Cabinet colleagues are increasingly concerned, however, that increasing the allocation to health spending for 2024 will make it tougher for them to secure extra money for their own departments.

Talks will intensify this week in advance of final decisions being made in the days leading up to the budget in one week’s time.

Green Party leader Eamon Ryan said the budget will be “more difficult than people think”. Speaking after Cabinet on Tuesday, Mr Ryan said there was an impression that there was a “big surplus we can spend on everything” but that the advice of the fiscal advisory council and other bodies was that putting too much money back in people’s pockets would cause inflation to “run away” again.

He said the “broad approach” would be to set aside corporate tax profits for investment in the future, spend money to protect people from cost of living pressures but avoid stoking inflation.

Mr Ryan’s comments come as Coalition leaders and spending ministers seek to tamp down expectations.

Speaking after Cabinet on Tuesday, Taoiseach Leo Varadkar warned: “Don’t believe anything you’re reading at the moment”. He said the budget would contain an income tax and USC package and a significant cost of living package which “people will feel the effect of before Christmas”.

He also said there would be help for businesses, and a focus on children with measures in childcare, education and social welfare, and investment in law and order. The minimum wage will be put up on budget day at a level “ahead of the rate of inflation”, he said.

Asked about tax breaks for landlords, Minister for Housing Darragh O’Brien said the Government recognised there had been “a flight of good landlords” from the market and that “effective and meaningful measures” would be forthcoming, adding that the Government had already made a decision in this regard earlier this year which was underpinning the approach.

He said that his hope was that the renters’ tax credit would be retained and increased in the budget.

Jack Horgan-Jones

Jack Horgan-Jones

Jack Horgan-Jones is a political reporter with The Irish Times