Vol. 453 No. 4
62 Mr. McCreevy asked the Minister for Finance, in view of the Government's commitment to firm management of the public finances as detailed in the document A Government of Renewal, if he will give his views on this statement in view of current expenditure levels. [9417/95]
The Government remain firmly committed to the fiscal policy parameters set out in our policy Programme, A Government of Renewal. Briefly, these envisage strict adherence to Maastricht's fiscal convergence criteria — i.e., that the annual general Government deficit should be no more than 3 per cent of GDP, and that the Gross Debt/GDP ratio will continue to decline satisfactorily towards 60 per cent. In that context, we undertook to maintain the EBR prudently below 3 per cent of GNP, and to restrict the growth of current supply spending to a maximum of 6 per cent in nominal terms in 1995 and to an average annual rate of 2 per cent in real terms over the following two years of the Programme.
These undertakings were fully accommodated in the budget which I introduced on 8 February last. The 1995 EBR is set at 2.4 per cent of GNP; the general Government aggregates are well within the Maastricht limits; and the gross current supply service spending provision made in the 1995 budget represented an increase of 5.8 per cent over the 1994 outturn. It is not possible at this early stage to make a firm judgment on the prospective outturn for 1995 or the fiscal outlook for 1996 and 1997. However, the budgetary indicators over the year to date are broadly supportive of the budget projections.
Since the budget, the Government has decided to provide an additional £140 million towards the payment of the entitlements of women under the EU Equal Treatment Directive; £60 million had already been provided for this in the budget, bringing the total payments this year to £200 million. The additional allocation of £140 million plus some other more minor expenditure changes have been reflected in the recently published "Revised Estimates for the Public Services". The effect of these changes is that the increase in gross non-capital supply services expenditure in 1995 is now 6.9 per cent as compared with 5.8 per cent provided for in the budget. If the £140 million is excluded from the figures then the increase in gross current spending is 5.6 per cent, actually below the increase on budget day and well within the Government's 6 per cent limit this year.
