Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

It is difficult enough to answer the question. The connection between growth and budgetary correction level is probably between gross national product, GNP, and the amount of taxes that flow through the Exchequer. It is quite a complicated question to answer. If the economy grows very strongly in GNP terms with many people going back to work, paying income and expenditure taxes, no longer on social welfare payments, then this would be advantageous to us. As confidence builds and as people spend, one gets more yields from excise and VAT. For example, one sees quite a boost in excise from car sales in the first three months of 2014.

In general terms, we need to make an adjustment of €2 billion for the next budget. After that, the growth projections we have in this document will carry forward beyond next year. There should be no further adjustment then for 2016 to 2018, inclusive. By 2018, we will have a structural balance. The growth figures in this forecast get us into that position.

We will have to do the full €2 billion in cuts, based on the figures presented here. If matters improve during the course of the year, we will see how it plays out and it should improve the situation.