Dáil Éireann Debate, Thursday - 11 June 2015
89. Deputy Michael McGrath asked the Minister for Finance his views on the Irish Fiscal Advisory Council's claim that the Stability Programme Update 2015 does not present a full picture of the likely costs of demographic ageing and cost pressures in delivering existing programmes; and if he will make a statement on the matter. [22924/15]
Amharc ar fhreagraAs stated in the Stability Programme Update (SPU) and the Spring Economic Statement (SES), the 2016 forecast reflects a budgetary package of €1.2 billion, evenly split between revenue and expenditure measures. Such a package amounts to around 0.6 per cent of GDP.
Post 2016, the fiscal forecasts included in the SES and the SPU, and all related general government expenditure ratios, reflect a no-policy-change scenario. However, this no-policy-change scenario does provide for a €300 million increase in gross voted expenditure per annum to offset the demographic pressures. Funds will also be available to reallocate within expenditure arising from efficiency savings on policy measures and certain live register savings. The no-policy change scenario also provides for indexation of the income tax system at an estimated cost of €300 million.
This no-policy change scenario results in the pace of structural adjustment in the period 2017 to 2020 significantly exceeding the minimum requirement under the preventive arm of the Stability and Growth Pact (SGP).
