Lisa Chambers
Ceist:253. Deputy Lisa Chambers asked the Minister for Finance his views on supporting proposals to exclude defence spending from the calculation of excess deficit rules. [41619/16]
Amharc ar fhreagraTuesday, 17 January 2017
Ceisteanna (253)
Freagraí scríofa
The fiscal rules, which apply under the Stability and Growth Pact (SGP), are intended to promote budgetary discipline and help ensure the sustainability of the public finances. These rules were also given domestic legal effect through the Fiscal Responsibility Act 2012 following the passage of a constitutional referendum in May 2012 in which the Irish people supported accession to the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union.
The rules are designed to ensure that increases in public expenditure are sustainably financed and do not rely on cyclical or windfall revenues. The deteriorating international outlook illustrates the need for caution and prudent economic and fiscal policies.
These rules do not per se limit public spending. They do, however, require that any additional spending is financed through sustainable revenue raising measures. This is not unreasonable.
For this reason I would not support efforts to exclude areas of permanent recurring expenditure such as defence spending from the assessment of compliance with the SGP, as such an approach could undermine fiscal sustainability in the relevant Member States. Having said that, it is important to note that there is existing flexibility within the fiscal rules that is designed to promote public investment in vital capital infrastructure, and I am supportive of greater flexibility in this area.