I propose to take Questions Nos. 88 and 90 together.
Simplistically, adding the nominal general government balance (GGB) presented in Table 6 of the Summer Economic Statement 2019 (SES) to the indicative nominal budgetary package would result in the nominal budgetary package increasing by the same amount and the GGB accordingly falling to zero each year, all else being equal.
Assessment of the expenditure benchmark and structural balance is based on European Commission forecasts and, as a result, a direct one-to-one comparison following the above hypothetical reallocation is not possible. This assessment furthermore relies upon numerous variables, including the composition of the new budgetary package and macroeconomic factors.
The difference between the GGB and fiscal space is conceptual in nature. The GGB represents the projected difference between general government revenue and general government expenditure. Fiscal space, which is derived from the expenditure benchmark, represents the legally permitted increase in expenditure and is effectively decoupled from revenue performance.
As the Deputy is aware, this Government is committed to framing the budgetary parameters based on what is appropriate for Ireland and not simply a full and literal application of legally permitted limits. My Department, as well as other commentators such as the Irish Fiscal Advisory Council, have repeatedly highlighted the unsuitability of the harmonised fiscal rules. The Summer Economic Statement included the fiscal space table purely for transparency and completeness.
