Dáil Éireann - Volume 687 - 08 July, 2009

Written Answers. - Budgetary Strategy.

Deputy Martin Ferris asked the Minister for Finance when he will circulate his budget strategy memo. [27281/09]

Deputy Joe Costello asked the Minister for Finance the level of fiscal consolidation he expects to carry out in budget 2010; the approximate balance between tax and expenditure measures; the projected negative tax buoyancy and negative growth impact of this consolidation exercise on the economy in 2010; and if he will make a statement on the matter. [27990/09]

  Deputy Brian Lenihan: I propose to take Questions Nos. 34 and 37 together.

The Supplementary Budget set out a multi-annual plan to bring the General Government deficit to 3% of GDP by end-2013. As part of this plan, measures on expenditure and tax revenue amounting to up to €4 billion in 2010 and 2011 are required if we are to restore the public finances to sustainability. The economic and fiscal forecasts as published in the Supplementary Budget have factored in the broad impact of these aggregate measures.

[864] As I have already mentioned here today, the Commission on Taxation, which is expected to complete its work shortly, and the Special Group on Public Service Numbers and Expenditure, which is due to report to me imminently, will have important roles to play in identifying measures that will improve the budgetary position in future years. In this context, I have previously outlined that the majority of future adjustments will have to be borne on the spending side as the scope for further increasing income taxes is limited. I have also stated that I view the revenue raising taxation measures as set out in the Supplementary Budget as the maximum that can be obtained and the expenditure adjustments as the minimum that will be raised.

Also, as I outlined in my response to a Priority Question earlier, it is intended that the Pre-Budget Outlook will be published in mid to late October, setting out the pre-budget position in more detail based on the latest available data. This will provide the House with the most up-to-date information on a pre-budget basis and will assist in informing the debate in the run up to the presentation of Budget 2010. I will then set out the details of Budget 2010 in my address on Budget Day in early December and the Budget will set out further information in relation to the medium term economic and fiscal projections.

Restoring sustainability to the public finances is vital to the renewal of the economy and we are committed to taking the necessary measures in this regard. We recognise that these measures are difficult but equally we know that they are essential. The corrective measures taken up to this point and our commitment to taking further action will help to ensure the confidence of investors in Ireland, provide greater consumer confidence and place us in a position to benefit from the upturn in the international economy when it occurs.

As is the usual practise, I intend to bring the Budget Strategy Memorandum to Government in the coming weeks. In line with the rules governing Cabinet confidentiality, I will not comment on the contents of the Budget Strategy Memorandum. However, as the Deputy will be aware, the recent Supplementary Budget set out, for the first time, the broad outline of the budgetary strategy for the medium term.