Thursday, 28 February 2013

Questions (22, 43, 59)

Billy Kelleher

Question:

22. Deputy Billy Kelleher asked the Minister for Finance when, in view of the revised arrangements in respect of the promissory notes, he expects to be in a position to update the planned budgetary adjustment in 2014; and if he will make a statement on the matter. [10606/13]

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Joan Collins

Question:

43. Deputy Joan Collins asked the Minister for Finance if, following the recent Irish Bank Resolution Corporation-promissory note deal, it is his intention to pass on the benefit of the claimed €1 billion in savings in the form of a less severe budget adjustment in budget 2014; if so, if he will quantify the amount of any such new adjustment target; and if he will make a statement on the matter. [10631/13]

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Richard Boyd Barrett

Question:

59. Deputy Richard Boyd Barrett asked the Minister for Finance if, following the recent Irish Bank Resolution Corporation-promissory note deal, it is his intention to pass on the benefit of the claims that €1 billion in savings in the form of a less severe budget adjustment in budget 2014; if so, if he will quantify the amount of any such new adjustment target; and if he will make a statement on the matter. [10630/13]

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Written answers (Question to Finance)

I propose to take Questions Nos. 22, 43 and 59 together.

As I have stated in recent days, it is important to note that some aspects of the promissory note deal are yet to be finalised. For example, the liquidator is in the process of overseeing a valuation and sales process for the assets of IBRC, while the final payments made under the ELG Scheme have not yet been determined.

Nevertheless, as referred to by the Deputy, simulations ran by my Department estimate that the General Government deficit will improve by approximately €1 billion per annum over the coming years, which will bring us €1 billion closer to attaining our 3% deficit target by 2015. However, this has to be seen in the light of the estimated General Government deficits of €8.9bn and €5.3bn in 2014 and 2015 respectively, as per Budget 2013.

While this agreement is a significant step forward in restoring sustainability to our public finances, this Government is well aware 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 requirements to bring our deficit to under 3% of GDP by 2015 as per the EDP, it makes sense that we bring balance back to the public finances and stabilise and reduce our debt burden.

As we are only two months into the year, I will not be drawn into speculation on the composition of the next Budget and the impact that this deal will have on it. There are a lot of other moving parts to be considered such as economic growth, tax take and expenditure performance. All of the above, including the impact of the promissory note deal, will form the basis of Government decisions regarding the Budget.