Pearse Doherty
Question:59. Deputy Pearse Doherty asked the Minister for Finance the details of the fiscal space available for each of the next five years, in tabular form, given the 2016 stability programme update. [9089/16]
View answerWednesday, 4 May 2016
Questions (59)
Written answers
The preparation of the Stability Programme Update April 2016 (SPU) was a necessary step to ensure compliance with requirements under the European Semester. The technical estimates provided illustrate the macro-fiscal outlook over the medium term on a no policy change basis relative to Budget 2016. These estimates form a necessary mid-year input to the Semester process and must be provided ahead of formulating Budget 2017 when active policy decisions will be taken. Estimates of fiscal space were not published in the document as it is submitted on a no policy change basis.
Having said that I announced last Wednesday in this House that the estimated net fiscal space was of the order of €10-€11 billion over the period 2017 to 2021. I also announced that there would be approximately €900 million of net fiscal space available in 2017. I stressed that both of these estimates are work-in-progress and subject to change; the calculations require inputs from the European Commission and these should be available shortly.
At Budget time, my Department estimated a figure of €8½ billion net fiscal space for the period 2017 to 2021. This was based on achieving a medium term budgetary objective or MTO of 0% of GDP by 2019. As I made clear in a statement earlier this year, any relaxation of the MTO would add around €1½ billion to this figure; the MTO has now been revised.
The remainder of the difference between the net fiscal space estimates provided in Budget 2016 and now is accounted for by other moving parts driving the estimation of the expenditure benchmark rule. These factors include a higher GDP deflator, a stronger rate of potential GDP growth and a lower convergence margin relative to Budget time.
Finally, in response to a request from the Deputy last Wednesday I also said that my officials would be available to discuss technical issues related to the SPU; I understand that the Deputy has since been in contact with my officials and a meeting arranged.