Dáil Éireann Debate, Tuesday - 18 October 2016
194. Deputy Pearse Doherty asked the Minister for Finance if he will confirm the assertion from the Irish Fiscal Advisory Council that the State will miss its key borrowing target, the structural balance in 2017, as a result of the €1.3 billion budget 2017 package, as opposed to the €1 billion package mooted in September 2016; and if he will make a statement on the matter. [30753/16]
Amharc ar fhreagraThe Deputy should be aware that the correct comparator with the nominal Budget package of €1.3 billion is the €1.19 billion which was set out in the Summer Economic Statement. This was based on fiscal space of €1 billion, but the effect of capital smoothing meant that actual capital spend of €250m only absorbed €60 million in terms of available fiscal space. Budget 2017 introduced a package of €1.3 billion which uses fiscal space of €1.2 billion.
Based on the Commission's matrix specifying the required annual fiscal adjustment towards Medium Term Budgetary Objective (MTO), the required adjustment in our structural budget balance in 2017 was fixed at 0.6 percentage points. This requirement was set reflecting both our public debt sustainability and the cyclical position of Ireland's economy. The requirement was frozen based on Commission outlook for Ireland as of Spring 2016. The projected pace of structural correction of 0.8 percentage points in 2017 as set out in Budget 2017 exceeds this requirement.
