Wednesday, 27 February 2013

Questions (88)

Brian Stanley

Question:

88. Deputy Brian Stanley asked the Minister for Finance the number of jobs that would be created by an annual €1 billion enterprise stimulus; the multiplier effect this investment would have on the economy and the savings to the State. [9063/13]

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Written answers (Question to Finance)

The economic and labour market impact of any stimulus depends upon the type of measure involved. Fiscal multipliers vary according to the fiscal instruments used, and the impact on both growth and job creation as a result can differ accordingly.

Ireland is a small, open economy with imports accounting for over three quarters of GDP. As a result, a considerable amount of any stimulus is likely to leak out through a reduction in these imports. For this, and other reasons, the fiscal multiplier in Ireland tends to be somewhat lower than in many other European countries.

When discussing the implications of an additional stimulus package for the Irish economy it is important not to lose sight of the current fiscal position of the State and the opportunity cost of such funds. The Government is acutely conscious that there remains a considerable gap between what we get in revenue and what we spend. This situation is not sustainable over the longer term. In addition to the requirement to bring our deficit to under 3% of GDP by 2015 as per the Excessive Deficit Procedure, it makes sense that we bring balance back to the public finances and stabilise and reduce our debt burden. This is how we will ultimately create growth and jobs on a sustainable basis.

Question No. 89 answered with Question No. 84.