asked the Minister for Finance the effects of the oil prices increase on the 1979 budget figures.
Ceisteanna—Questions. Oral Answers. - Oil Prices Increase.
4.
Following the increase in oil prices, Departments and State bodies have been urged by the Minister for Industry, Commerce and Energy to reduce energy consumption by eliminating waste and encouraging conservation and are taking appropriate measures to this end. In general, therefore, it is not expected that there will be any significant overall budgetary excess on departmental expenditure provisions as a result of the oil price increases. There are, however, a small number of areas, for example, CIE where, because of the high volume of oil consumption, some additional costs may be unavoidable.
Insofar as revenue is concerned, it is expected that there will be a gain in VAT receipts, given the price increases which have taken place to-date. This is, however, expected to be more than offset by a shortfall in excise duties at specific rates because oil supplies are unlikely to show the growth over last year which was expected at budget time.
Does that mean that in regard to the deficit as set out in the budget on 7 February the Minister does not see any change in those figures at the end of the year?
As the Deputy heard I dealt with the question from the point of view of the cost of oil to Departments, State bodies and so on. I also dealt with the question of revenue. I have indicated that while we cannot be sure at this stage, there is likely to be some shortfall as between the gain in VAT receipts and the reduction in excise duties.
The question asked about the change in the budget figures for 1979. Do I gather from the Minister's reply that he does not see any great change? There may be slight variations from one to the other but there will not be any great change in the budget figures by the end of the year?
Yes. As I have indicated, on the side of the equation relating to the cost of purchasing oil for Government Departments and so forth we do not see any great change there. On the other side, we expect some shortfall on the lines I have indicated. It is impossible at this stage to estimate the extent of that but it would not, at this stage at any rate, be expected to be very substantial.
Will the deficit in the budget be roughly the same as the Minister thought it would be in February?
Yes, in so far as we are dealing with this item. I can only deal with this item at this stage.
I am talking about the budget figures and the effect of oil prices on them.
Is the Minister aware that Government spending is running at about £500 million so far this year over the figure for the same period last year? Is this on target or above it?
This does not refer to oil. It refers to budget figures.
Oil could be one of the reasons for it.
Does the Minister's answer to the question take into account the very probable further increases in oil prices? Does he accept that there will be additional increases in oil prices during the latter months of this year? In that event will there have to be a revision of budget figures?
The reply takes further increases into account in so far as that is possible. I am sure the Deputy will appreciate that nobody can say at this stage what the price of oil is likely to be next December, for instance. In so far as it can be taken into account this has been done. The whole area is, as I am sure the Deputy appreciates, one of considerable uncertainty for consumer and producer countries.