Summer Economic Statement 2018 will update the figures on available parameters for Budget 2019 taking into consideration the publication of the European Commission's Spring Economic Forecast. These parameters will account for all policy changes introduced since Budget 2018.
The Stability Programme Update 2018 set out pre-committed expenditure of €2.6 billion for next year. This consisted of:
- €1.5 billion (National Development Plan related)
- €0.4 billion (to provide for demographic costs)
- €0.4 billion (to provide for the public sector pay agreement)
- €0.3 billion (to provide for carryover costs next year of measures that were introduced in the budget for this year).
This expenditure leads to a projected deficit of 0.1 per cent of GDP forecast for next year.
The resources available will become clearer within the next couple of weeks. However, any tax/expenditure package that goes beyond €2.6 billion will necessarily involve additional borrowing (i.e. the deficit would be greater than the 0.1 per cent that is currently projected)
Finally, as I have stated on numerous occasions, the Government will make policy based on what is right for the economy. At a time when we are approaching full employment, it is essential that Government budgetary policy does not repeat the pro-cyclical mistakes of the past and risk jeopardising the sustainability of our public finances and future living standards.