Minister Donohoe publishes Summer Economic Statement
Minister of State for Finance, Public Expenditure and Reform, Patrick O'Donovan; Minister for Finance, Public Expenditure and Reform, Paschal Donohoe and Minister of State with special responsibility for Financial Services and Insurance, Michael D'Arcy at the publication of the Summer Economic Statement
Finance and Public Expenditure & Reform, Paschal Donohoe today published the Government’s Summer Economic Statement (SES) The Statement is an integral part of the reformed budgetary process that facilitates a discussion of the options in advance of the annual Budget in October.
The Statement, which outlines the broad parameters of the Government’s economic strategy, also provides an updated assessment of the fiscal space for next year – this is estimated at €1.2 billion, consistent with ‘balancing the books’ next year. The full-year costs of measures introduced for this year mean that the current scope for new additional measures is around €500 million for next year.
The SES sets out that the Government will:
- Balance the books next year;
- Implement sensible budgetary policies designed to ensure stability and continued improvements in living standards;
- Establish a rainy day fund from 2019 onwards, to be capitalised with annual contributions of €500 million from the Exchequer;
- Increase capital investment by an additional €500 million in each of the years 2019-2021 to further develop our economic and social infrastructure so that we can better meet the needs of our people as our economy, and society, grows. This increase, which will enhance the competitiveness and resilience of the Irish economy, will result in gross voted capital of nearly €7.8 billion in 2021. This will be 85% higher than the outturn of €4.2 billion in 2016.
- Focus on the totality of expenditure – which amounts to around €60 billion – in order to ensure maximum value-for-money.
- Continue to reduce the debt to GDP ratio until the 60% legal threshold is achieved. Thereafter work will begin on reducing the ratio to 55% of GPD and, once major capital projects have been completed, the reduced rate of 45% will be targeted.
Minister Donohoe said:
The economy is growing at a healthy pace and generating jobs-rich growth. Indeed, we are now approaching a situation in which jobs are available for all those who want them. Now is the time to build on the gains of recent years, to improve the resilience of the economy and to address the capacity constraints that are emerging.