Dáil Éireann debate -
Tuesday, 19 Oct 1999

Vol. 509 No. 4

Written Answers. - Spending Projections.

Derek McDowell

Question:

201 Mr. McDowell asked the Minister for Finance the aggregate spending estimate for the year 2000 based on no policy change and taking into account spending on foot of announcements already made public; and if he will make a statement on the matter. [20415/99]

Minister for Finance (Mr. McCreevy)

Projections of aggregate expenditure on a no policy change basis for the years 2000 and 2001 were published as part of the documentation with the 1999 budget. A copy of the relevant table follows.

As part of the Government's deliberations on the 2000 estimates and budget, reviews of the 2000 no policy change projections of aggregate expenditure are carried out. These reviews take account of numerous factors which impact on the projected cost in 2000 of maintaining the existing level of services, for example, Government decisions taken since the 1999 budget, including decisions on the national development plan and estimating changes in the light of more up to date information on expenditure trends.

Since these reviews are ongoing as part of the budgetary process, interim no policy change figures would serve no useful purpose. The Abridged Estimates Volume giving the expenditure estimates for 2000 will be published before the budget on 1 December.

TABLE 1

Summary of Current and Capital Budgets, 1998 and 1999 and Projections for 2000 and 2001

	1998EstimatedOutturn	1999Post-BudgetEstimate	2000Projection	2001Projection
Current Budget	£m	£m	£m	£m
Current Expenditure
Gross Voted (Departmental Expenditure Voted by Dáil)	12,230	13,332	14,157	14,846
Non-voted (Central Fund expenditure)	3,436	3,407	3,267	3,236
Expenditure from Social Insurance Fund	2,033	2,161	2,260	2,338
Gross Current Expenditure	17,699	18,900	19,684	20,420
less Appropriations-in-aid (including PRSI)Note 2	(3,219)	(3,479)	(3,659)	(3,755)
less Departmental BalancesNote 3	(10)	(20)	–	–
Net Current ExpenditureTables 4 and 4a	14,469	15,401	16,025	16,665
Current Receipts
Tax RevenueTable 2	16,093	17,335	18,520	19,735
Non-Tax RevenueTable 2	361	401	367	362
Total Current Receipts	16,454	17,736	18,887	20,097
Current Budget Surplus	1,985	2,335	2,862	3,432
Capital Budget
Capital Expenditure
Gross Voted (Departmental Expenditure Voted by Dáil)	1,950	2,308	2,425	2,545
Non-voted (Expenditure under legislation)	188	52	93	103
less Appropriations-in-aidNote 2	(85)	(113)	(108)	(112)
Net Capital ExpenditureTables 5 and 5a	2,053	2,247	2,410	2,536
Capital Resources	737	836	576	607
Capital Budget Deficit	(1,316)	(1,410)	(1,833)	(1,929)
Exchequer Surplus before Contingency	668	925	1,029	1,502
General Contingency ProvisionNote 4	–	–	(300)	(600)
Exchequer Surplus with Contingency	668	925	729	902
General Government Surplus	951	1,057	938	1,147
GG Surplus as % of GDP
including contingencyNote 1	1.7%	1.7%	1.4%	1.6%
before contingencyNote 1	1.7%	1.7%	1.8%	2.4%
GDP Value (ESA 95 basis) Note 1	56,675	62,125	67,500	72,925

Notes to Table 1Note 1.The projections reflect:

(a)the full year impact of the measures announced in the 1999 Budget;

an overall net current expenditure envelope of 4% per annum for 1999 to 2001 within which expenditure will be managed;

interest rates are based on core eurozone rates;

exchange rates for EMU participant countries are assumed to be bilateral central rates of the ERM agreed in May last as the basis for conversion to the euro with pro-rata adjustments for other currencies;

(b)under the taxation heading a technical provision for further possible changes in both 2000 and 2001 in personal taxes costing £350 million in a full year – the level of tax changes in these years will be subject to review in the light of emerging economic conditions;

(c)a provision for the cost of reducing Corporation Tax rates by 4 percentage points in each of the years 2000 and 2001.

The figures for GDP and GGB values for 1998 are the ESA 95 equivalent used for defining GDP and GGB values from 1999 on. The ESA 79 equivalent value for 1998 GDP is £60,200 million and that for the GGB is £1,172 million – a surplus of c.2% of GDP.

Note 2.Appropriations-in-Aid are Departmental recipients which, with the approval of the Dáil, may be retained by a Department or Office to offset expenses instead of being paid into the Exchequer Account of the Central Fund. Details of gross voted departmental expenditures are contained in the Estimates for Public Services. PRSI receipts accrue to the Social Insurance Fund.

Note 3.Departmental balances are those amounts issued from the Exchequer Account of the Central Fund for departmental spending in one year which remain unspent at year-end and are carried forward to be used in the next year.

Note 4.A prudent contingency 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. While such variations are likely to be both positive and negative, it has been considered appropriate to allow in the projections for a modest negative net impact on the General Government Surplus and Exchequer Surplus.

Derek McDowell

Question:

202 Mr. McDowell asked the Minister for Finance the changes, if any, he envisages in the capital deficit or the current budget surplus as a percentage of GDP as set out for the years 2000-2001 in the stability programme as published in December 1998; and if he will make a statement on the matter. [20416/99]

Minister for Finance (Mr. McCreevy)

New projections for the capital deficit and the current budget surplus for the years 2000-1 and a projection for 2002 will be included in the updated stability programme for Ireland which will be published on budget day 1 December.

The updated figures will take account of –inter alia– the decisions on capital and current spending taken in the 2000 budget, the national development plan, the estimated outturn for current and capital spending in 1999 and updated estimates for GDP for 1999 and projections for 2000-02.