Dáil Éireann Debate, Tuesday - 17 April 2018
230. Deputy Pearse Doherty asked the Minister for Finance the way in which the Central Bank surpluses are factored into the fiscal space for the coming period; if an expected decline in the surplus is factored into such calculations; and if he will make a statement on the matter. [15295/18]
Amharc ar fhreagraAs the Deputy is aware, the calculation of fiscal space decouples expenditure growth from revenue developments. Fiscal space represents the additional capacity arising from the permitted expenditure growth rate that is available for expenditure increases and/or tax reductions. Fiscal space may be increased through the introduction of discretionary revenue measures that increase revenue and conversely it is reduced by discretionary revenue measures that lower revenue.
As the surplus income of the Central Bank of Ireland paid to the Exchequer is not discretionary it does not impact on the expenditure benchmark.
The surplus income from the Central Bank of Ireland, excluding capital gains, is counted as general government revenue and therefore improves both the general government balance and the structural balance. Table 10 in the Economic and Fiscal Outlook issued for Budget 2018 includes the forecasts for this surplus income out to 2021.
Finally, I would point out that I regard the fiscal stance as more important than fiscal space. In formulating budgetary policy, the Government will do what is right for the economy, and will not adopt pro-cyclical policies that jeopardise the sustainability of the public finances or our future living standards.
