Dáil Éireann Debate, Tuesday - 24 January 2017
143. Deputy Pearse Doherty asked the Minister for Finance the potential impact of items (details supplied) on the fiscal space for 2018, 2019 and 2020; if he will be issuing revised Exchequer targets for 2017 in line with the 2016 Exchequer out-turn; and if he will make a statement on the matter. [2812/17]
View answerAs the Deputy will appreciate, it is a long standing practice of the Department of Finance not to revise the Budget day fiscal forecasts, based on the end year outturn. However, the Exchequer tax revenue performance will continue to be monitored closely in the coming months, along with all other components of the Exchequer. These performances will be reviewed as part of the next official fiscal forecasts, which will be set out in the Stability Programme Update (SPU) 2017, due to be published in April 2017.
The fiscal space is calculated in line with the trend potential growth rate of GDP less a convergence margin that applies as Ireland is not yet at its medium term budgetary objective (MTO) under the balanced budget rule. It should be noted that changes in revenue levels are not relevant to the calculation of fiscal space unless it arises from a discretionary policy decision. Additional revenue arising from discretionary measures increases the overall fiscal space while the converse in relation to revenue reductions also applies. As such the 2016 tax revenue is not expected to have any material impact on the fiscal space available for 2018 and subsequent years.
As the Deputy will be aware, the medium term fiscal space projections set out in Budget 2017 are not final as they are based on projections for the GDP deflators, reference rates, convergence margins and general government expenditure outturns for each of the relevant years. The actual GDP deflators, reference rates and convergence margins values used to assess compliance with the rules each year will be set by the European Commission using their estimates compiled in their Spring and Autumn forecasts. The general government expenditure values used to evaluate adherence to the rules will be the final Central Statistics Office (CSO) estimates from the National Income and Expenditure (NIE) and Government Finance Statistics (GFS). Revised projections of fiscal space for the medium-term will be published by my Department in the SPU and / or the Spring Economic Statement.
