Dáil Éireann debate -
Thursday, 20 Mar 1997

Vol. 476 No. 6

Written Answers. - Financial Projections.

Charlie McCreevy

Question:

50 Mr. McCreevy asked the Minister for Finance the econometric model used in the production of the 1998 and 1999 projections published with budget day documentation; the sensitivity of these projections to policy changes; and the expenditure programmes for which he has factored in any significant real savings. [7725/97]

Minister for Finance (Mr. Quinn)

The projections for 1998 and 1999 published with the budget day documentation were based on our assessment of the likely course of the economy over 1997 and the following two years. The Department's internal economic expertise, rather than a specific econometric model, was used in the preparation of the projections, though the information obtained from model exercises about the economy's behaviour informed the overall forecasting process.

The sensitivity of the projections to policy changes would of course depend on the policy change specified. If the Deputy wishes to supply me with a set of policy changes, I can provide an analysis of the sensitivity of the budgetary projections to such changes.

With regard to expenditure programmes for 1998 and 1999, the notes in the budgetary documentation state clearly that the projections for 1998 and 1999 reflect

"(a) the full year impact of the measures announced in the 1997 budget"

and

"(b) the cost of maintaining the existing levels of service in all other areas".

These notes also stated that "in order to provide a realistic view of the emerging 1998 and 1999 position, provision is made in the areas of pay, tax and social inclusion for the balance of the costs of the undertakings entered into in the national programme "Partnership 2000 for Inclusion, Employment and Competitiveness"."

Finally, the notes refer to the contingency provision as follows:

A prudent provision is made against factors outside the control of Government that may impact on the budget but which cannot be foreseen at this stage. Examples are variability in tax buoyancy and exceptional costs arising in areas of public expenditure.