asked the Minister for Finance the annual amount of budget overruns from 1978 to date; the position for 1985; and if he will make a statement on the matter, particularly in relation to the effect on the taxpayer.
Written Answers. - Budget Overruns.
75.
I have assumed in my reply that the Deputy is referring to overruns on the current budget. The following table sets out, in respect of the current budget deficit, the budget estimate, the outturn as published in the budget booklets, the divergence between estimate and outturn and the outturn presented as a percentage of GNP, for each year from 1978 to 1984:
|
Budget Estimate |
Outturn |
Divergence |
Outturn as % of GNP |
||
|
£m |
£m |
£m |
% |
% |
|
|
1978 |
405 |
397 |
–8 |
–2 |
6.1 |
|
1979 |
289 |
522 |
+233 |
+81 |
6.8 |
|
1980 |
353 |
547 |
+194 |
+55 |
6.1 |
|
1981 |
515 |
802 |
+287 |
+56 |
7.4 |
|
1982 |
679 |
988 |
+309 |
+46 |
8.0 |
|
1983 |
897 |
960 |
+63 |
+7 |
7.1 |
|
1984 |
1,089 |
1,039 |
–50 |
–5 |
7.1 |
Note: Because of the transfer from January 1984 of responsibility for the day-to-day operation of the postal and telecommunications services to An Post and Bord Telecom Éireann, the estimate and outturn figures for 1984 are not directly comparable with those for 1983 and earlier years.
The budget estimate for the current budget deficit for 1985 was £1,234 million, equivalent to some 7.9 per cent of GNP. Assuming no unexpected developments over the remainder of the year, the outlook is for a current budget deficit of the order of ½ per cent of GNP above the budget estimate.
It is to be expected that there will be a variation between the estimate for the current budget deficit prepared at budget time and the eventual outturn, as the deficit measures the difference between two very large flows. It will be noted that the variations in 1983 and 1984 and the expected variation in 1985 are well within normal estimating bounds. Control over the management of the annual budget has, therefore, been firmly restored.
The consequence of any budget deficit, whether planned or otherwise, is that the level of borrowing increases and that the onus of paying for the services so financed is transferred from the year in question to later years. The present level of taxation, as well as the present level of budget deficit, are to a significant degree determined by the large increase in debt service costs which has resulted, inter alia, from high levels of annual borrowing in the past. Debt service charges have increased from £418 million, or 6.4 per cent of GNP, in 1978 to an estimated £1,991 million, or just under 13 per cent of GNP, this year.