Dáil Éireann debate -
Tuesday, 28 Apr 1998

Vol. 490 No. 2

Written Answers - Budgetary Strategy.

Paul McGrath

Question:

66 Mr. McGrath asked the Minister for Finance the commitment, if any, he gave when the punt was revalued to maintain public expenditure at the level of the 1998 post budget estimate; and if he will make a statement on the matter. [9602/98]

Minister for Finance (Mr. McCreevy)

The communiqué issued on behalf of EU Finance Ministers and Central Bank Governors following the meeting on 14 March 1998 at which the revaluation of the Irish pound's central rate in the ERM was decided including the following statement:

The ministers and governors noted the firm resolve of the Irish authorities not to exceed the expenditure commitments in the 1998 budget and to ensure that any revenues above those anticipated in that budget are used to raise the primary surplus, and thus the general government surplus, above the planned figures.

The Government's resolve, as indicated in the communiqué, to use any additional revenues in 1998 to increase the general government surplus rather than to fund extra expenditure marks its determination to ensure budgetary policy supports continued strong economic growth in a balanced and sustainable way. With the revaluation of the Irish pound, the Government's policy on spending will help to ensure any unwelcome additions to demand and inflationary pressures in the economy are avoided. It is the Government's firm intention to pursue economic and budgetary policies which will best support our efforts to keep the economy on a path of sustainable growth with price stability.

Adherence to budgetary discipline is something to which all prospective participants in economic and monetary union are committed. The acceptance by all EMU participants of the necessity for tight budgetary policies as set out in the Stability and Growth Pact will facilitate the achievement of the stable economic conditions essential to the success of the single currency.

In relation to 1998 expenditure, I will continue to monitor the position closely during the year. In consultation with my Cabinet colleagues I will aim to ensure expenditure is managed in accordance with the Government's overall budgetary strategy and the requirements of EMU membership. Specifically, I will aim to ensure total expenditure in 1998 does not exceed the amount provided for in the 1998 revised Estimates for Public Service. My statement on the end-March Exchequer returns said that spending in the first quarter was broadly in line with expectations.