Vol. 448 No. 1
17 Mr. McCreevy asked the Minister for Finance if he will make a statement on the economic or other criteria used in deciding that, for the lifetime of this Government, growth in the annual cost of current supply services spending will be inflation plus 2 per cent [1578/95]
20 Dr. O'Hanlon asked the Minister for Finance if the growth in current supply will be a maximum of 6 per cent as stated in the Programme for Renewal: and if he will make a statement on the matter. [1588/95]
I propose to take Questions Nos. 17 and 20 together.
The Government's programme makes clear its commitment to firm management of the public finances.
In particular, the Government has accepted the fiscal criteria set out in the Maastricht Treaty: the annual General Government Deficit will be no more than 3 per cent of GDP, which roughly translates to an Exchequer Borrowing Requirement of less than 3 per cent of GNP and Ireland will continue to make progress in reducing the debt/GDP ratio towards 60 per cent.
The implementation of all the economic and social measures to which we are committed in the programme is dependent on achievement of these targets.
The current expenditure targets, namely, a 6 per cent increase in 1995 and an average annual rate of 2 per cent in real terms over the following two years, were included in the programme, firstly, to underline the Government's general approach to budgetary policy and, secondly, to set a specific target which will ensure that the fruits of economic growth would be used for tax reform, as well as for improvement in public services.
The setting of targets that allow for reasonable expansion in expenditure on goods and services offers a real prospect, given the likely level of economic growth and inflation, that the Government will have sufficient resources available for tax reform. We are determined that such reform will promote employment opportunities and encourage enterprise in the economy.
