Tuesday, 2 July 2019

Ceisteanna (205)

Michael McGrath

Ceist:

205. Deputy Michael McGrath asked the Minister for Finance the reason €600 million is included in annexe 1 of the summer economic statement for tax reductions; the tax head or tax heads the €600 million falls under; the reason apparent budgetary decisions would be included in the calculation for net fiscal space; his views on whether net fiscal space as outlined in annexe 1 is the appropriate budgetary policy over the coming years; and if he will make a statement on the matter. [27946/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Summer Economic Statement (SES) 2019 sets out a medium term strategy involving an illustrative €0.6 billion in tax reductions each year to 2024. This is a technical assumption embedded in the projections.

The origin of the technical tax reductions dates back to the full application of net fiscal space, with the indicative allocation set out in the SES 2016 (table 2). In line with the Programme for Partnership Government this was distributed on a 2:1 basis between spending and tax to present an illustrative budgetary package. This assumption is carried forward within the extended range of fiscal forecasts.

The indicative nominal budgetary package in table 6 of the SES 2019 is consistent with this.

As the Deputy is aware, the exact amounts and distribution between revenue and expenditure is a matter for Government and will be announced at the time of the respective Budget. Such decisions will take into account the economic and social circumstances at that time and also the desired objectives.