Jonathan O'Brien
Question:75. Deputy Jonathan O'Brien asked the Minister for Finance if he will address matters (details supplied) regarding the summer economic statement 2018. [28755/18]
View answerTuesday, 3 July 2018
Questions (75)
Written answers
This has been addressed in previous responses to Parliamentary Questions No. 110 and 114 sent to the Deputy. I have reproduced the answers as follows for the Deputy's convenience.
The following is a breakdown of ‘pre-committed fiscal space for expenditure’ in Table 3 of the Summer Economic Statement:
|
€ billions |
2019 |
2020 |
2021 |
|
Demographics |
0.4 |
0.4 |
0.5 |
|
Public Service Stability Agreement |
0.4 |
0.3 |
0.2 |
|
Carryover of Budget 2018 measures |
0.3 |
0.0 |
0.0 |
|
Capital expenditure* |
1.0 |
1.0 |
1.1 |
|
Pre-committed Expenditure |
2.1 |
1.7 |
1.8 |
*This is the amount in fiscal space terms allowing for capital smoothing.
The following is a breakdown of ‘other’ in Table 3 of the Summer Economic Statement:
|
€ billions |
2019 |
2020 |
2021 |
|
Resources available for allocation |
0.8 |
1.3 |
1.3 |
|
Other non-voted and general government movements |
0.2 |
-0.7 |
0.9 |
|
Other |
1.0 |
0.6 |
2.2 |
The Deputy is asking what impact an increase in exchequer capital expenditure – in addition to existing National Development Plan (NDP) commitments - of c. €1.2 billion, €0.96 billion and €1.02 billion would have on fiscal space in 2019-2021 respectively.
Compared with the figures in Table 3 of the 2018 Summer Economic Statement, the increases would use fiscal space in the order of an additional c. €300 million in 2019, €540.3 million in 2020 and €794.8 million in 2021.
While the fiscal rules would permit such additional spending, the additional money would have to be raised from an increase in taxation or borrowing, increasing the deficit.
The fiscal rules alone are not sufficient to ensure sensible fiscal policy – increasing borrowing as our economy approaches full employment would be clearly inappropriate. Sound budgetary policy respects the rules but must be guided by prudent judgement to avoid repeating the pro-cyclical mistakes of the past. The Government is committed to a budgetary policy that reduces, rather than increases, borrowing and supports steady and sustainable improvements in living standards.