Dáil Éireann Debate, Tuesday - 16 June 2015
239. Deputy Pearse Doherty asked the Minister for Finance if he agrees with the Irish Fiscal Advisory Council that, post-2016, the medium-term projections for expenditure and tax revenue in the stability programme update 2015 do not fully meet the requirements of a medium-term fiscal plan, as envisaged in the Government’s budgetary framework; and if he will make a statement on the matter. [23093/15]
View answerThe Fiscal Council noted that the provision of indicative fiscal space for the forthcoming Budget was a welcome development in terms of fiscal transparency. Indeed, this sets the scene for the National Economic Dialogue to be held next month.
The post-2016 forecasts in the Stability Programme Update and the Spring Economic Statement reflect an increase in expenditure of €300m per annum to offset demographic pressures and indexation of the income tax system at an estimated cost of €300m in a full year. This adds to the realism and credibility of the forecasts.
However, the production of fiscal forecasts reflecting policy beyond 2016 requires specific decisions on the allocation of fiscal space for each year. Options include whether it should go wholly to expenditure (current / capital) or tax cuts or a combination of these and the iterative nature of forecasting over a four year period means that the range of potential fiscal projections is significant.
When Government has fully considered the appropriate use of the available fiscal space, this will be reflected in the fiscal forecasts.
