Tuesday, 22 October 2013

Questions (153, 164, 165)

Michael McGrath

Question:

153. Deputy Michael McGrath asked the Minister for Finance if he will provide a breakdown in summary form of the €2.5 billion adjustment in budget 2014; also specify the additional measures of €600 million bringing the overall correction to €3.1 billion. [44688/13]

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Michael McGrath

Question:

164. Deputy Michael McGrath asked the Minister for Finance if he will provide a detailed breakdown of note 3 of C14 of the budget documentation which states €0.6 billion of the budgetary adjustment comes from additional resources and savings elsewhere; and if he will make a statement on the matter. [44829/13]

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Michael McGrath

Question:

165. Deputy Michael McGrath asked the Minister for Finance if all the €3.1 billion adjustment mentioned in note 3 page C14 of the budget documentation will impact on the general Government deficit in 2014; or if some measures are non-recurring and therefore will not impact the general Government deficit; and if he will make a statement on the matter. [44830/13]

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Written answers (Question to Finance)

I propose to take Questions Nos. 153, 164 and 165 together.

As I outlined in my Budget Day speech, in order to achieve a deficit of 4.8% of GDP, a total adjustment package of the region €3.1bn was necessary. This comprised €2.5bn in expenditure cuts and tax increases complemented with additional resources/other savings of €0.6bn. A summary table of the adjustment package is outlined as follows.

-

€bn

Expenditure measures

1.6

Current expenditure measures

1.4

Increase in savings from Prior Year Measures

0.1

Capital expenditure measures

0.1

Taxation measures

0.9

Net new measures

0.4

Revenue carryover

0.5

Other

0.6

Total Adjustment Package

3.1

Additional detail on what encompasses the other elements on the adjustment package was requested. Firstly, the NTMA Budget debt service estimate for 2014 is lower than the corresponding April SPU estimate, of the order €0.2bn, due to an improvement in the interest rate environment generally and lower than previously planned bond issuance. Turning to the Central Bank income, during the summer, the Central Bank provided an estimate of the 2013 surplus income to be paid to the Central Fund in 2014 based on results to that date and projections for the remainder of the year. The Central Bank revised this estimate upwards by €0.1bn in September, in light of actual results for the first nine months and the consequent revisions or projections for the remaining three months of 2013. In terms of savings from the Live Register, the numbers in work rose by 33,800 in the year to the second quarter of 2013 and the Live Register at the end of quarter 3 2013 was down by just over 20,000 when compared to the same period last year. On foot of this recovering labour market, live register savings have exceeded those previously expected or the order €0.15bn. Finally, the remaining €0.15bn arises from a number of other factors mainly connected with state asset transactions.

Complementing tax and expenditure measures with additional resources and other savings, some of which may be once off, is consistent with the composition of previous adjustments published in the National Recovery Plan / Budget 2011 and the contribution of additional dividends outlined in Budget 2013. All of the €3.1bn adjustment announced in Budget 2014, as set out in the table above, will impact the general government deficit for 2014.