Dáil Éireann debate -
Tuesday, 27 Apr 1993

Vol. 429 No. 6

Written Answers. - 1993 Budget Statement.

Peter Barry

Question:

77 Mr. Barry asked the Minister for Finance if his attention has been drawn to an article in the Irish Business and Employers' Federation magazine which stated, inter alia, that the increase in both taxation and public sector spending in the budget was a regressive step and indicated some further relaxation of fiscal controls; if so, his views on this observation; and if he will make a statement on the matter.

Minister for Finance (Mr. B. Ahern)

I am aware of the publication referred to by the Deputy, and note that the full text of the sentence quoted by the Deputy reads... "While the overall budgetary stance was in line with IBEC's recommendations, the increase in both taxation and public sector spending was a regressive step and indicated some further relaxation of fiscal controls."

My Budget Statement of 24 February 1993 sets out clearly the Government's strategy in relation to the Public Finances. The IBEC, in their document, stated that the imperative to maintain firm contol over the public finances in order to ease pressure on interest rates was recognised by the Minister for Finance who set the EBR at 2.9 per cent of GNP, somewhat lower than commentators expected. The Deputy will be aware that much of the rest of the commentary in the document, which is date lined 15 March, 1993, has been overtaken by events. In particular, the concerns expressed by the authors about the importance to the budget targets of speedy reductions in interest rates have proved groundless given the pattern of repeated rate cuts which have since occurred — reductions which were clearly considerably facilitated by the approach taken by the Government in the budget.