merrion street

Speaking today the Minister for Finance, Michael Noonan T.D. said:

"I welcome the Fiscal Council's endorsement of my Department's macroeconomic forecasts for next year. I also note its view that the growth forecasts for the years beyond 2017 are considered plausible."

"The Council also state the fiscal projections contained in the Budget for 2017 and 2018 are consistent with the deficit and debt remaining on a downward trajectory. This analysis is to be welcomed as this is a central assumption underpinning the Budget and achieving a balanced budget by 2018. "

"I also want to welcome the Council's assessment that, provided the economy is growing at a sustainable rate, the use of available fiscal space as envisaged in the current forecasts would be consistent with prudent policy."

"The European Commission's recent assessment of the 2017 Draft Budgetary Plan stated it to be "broadly compliant" with the provisions of the Stability and Growth Pact, which is the same conclusion as last year. This indicates we are continuing on the right track and are making solid progress."

"Accordingly, based upon both the Commission's outlook to 2017 and Department of Finance's projections we are on track to secure a balanced budget in structural terms by 2018."

"I note IFAC's view that due to a technical reclassification issue beyond our control, we comply with the expenditure benchmark in 2016. This did allow for some additional spending within the rules this year and it was used to meet expenditure demands for vital public services and investment in key infrastructures, arising from a growing economy. Ultimately, it is the European Commission which assesses compliance with the fiscal rules after applying an overall assessment. Its clear opinion is that we are broadly compliant."

"I welcome the Council's view that the quality of the medium term budgetary forecasts published in Budget 2017 has improved. This innovation will serve to enhance the quality of the analysis and discussion around the budgetary framework. "

"I note the Council has raised some concerns over increased expenditure being funded through increased revenues from sources such as corporation tax. While Budget 2017 acknowledges a concentration risk, it should be borne in mind that corporation tax is expected to account for just 16 per cent of total tax revenue in 2016, which is still within recent norms. It should not be forgotten that VAT and income taxes still account for two thirds of all tax revenues. This is an issue that my Department continues to monitor closely in conjunction with the Revenue Commissioners."

"I note the Report highlights Brexit as a fiscal risk. As part of our "Brexit readiness" approach, a lower debt target of 45 per cent of GDP has been announced for the mid-to-late 2020s. This will help to provide additional fiscal 'shock absorption' capacity to the public finances."

"Further evidence of our fiscal prudence is once a balanced budget is reached in 2018, a contingency or "rainy day" fund will be established where it is proposed to retain within the Exchequer €1 billion per annum from 2019 of the available fiscal space. This approach represents careful budgeting and will provide a further counter-cyclical buffer."