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Fiscal Policy

Dáil Éireann Debate, Tuesday - 14 December 2021

Tuesday, 14 December 2021

Questions (232)

John Lahart

Question:

232. Deputy John Lahart asked the Minister for Finance his plans to implement recommendations (details supplied); and if he will make a statement on the matter. [61900/21]

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Written answers (Question to Finance)

Under the Ministers and Secretaries (Amendment) Act 2013 there is a requirement each year for Government to agree an overall Government Expenditure Ceiling for each of the following 3 years, to allocate this into Ministerial Expenditure Ceilings and then to inform Dáil Éireann.

To comply with this requirement, in line with the approach taken in 2021, expenditure ceilings for 2022 were provided in the 2022 Expenditure Report and indicative technical expenditure ceilings for 2023 and 2024 will be laid before the Dáil before the end of this month. The overall amounts to be included in these ceilings will be consistent with those agreed under the medium term expenditure strategy set out in the Summer Economic Statement (SES) which laid out overall ceilings for the period to 2025.

The SES set out the Government’s reformed medium-term fiscal architecture, which anchors budgetary policy via an expenditure rule whereby core expenditure growth will be kept in line with the trend growth rate of the economy.

The objective of this rule is to de-couple expenditure policy from cyclical variations in the economy and from windfall tax revenue. In its Fiscal Assessment Report, the Irish Fiscal Advisory Council welcomed this innovation to Ireland’s fiscal framework. I further note the Council’s view that the Government’s fiscal stance for next year strikes the appropriate balance between continuing to provide the necessary fiscal support to the economy while returning the public finances to a sustainable trajectory.

Finally, I have noted the Council’s recommendation in relation to the Government’s expenditure rule and I will take this advice under consideration.

I will formally respond to the Fiscal Assessment Report in the coming weeks.

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