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 €3.1 billion was necessary. This comprised €2.5 billion in expenditure cuts and tax increases complemented with additional resources - other savings of €0.6 billion. A summary table of the adjustment package is outlined below.
|
Adjustment Package
|
€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 of the adjustment package may also be useful. 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 of 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 of the order of €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.
