Lisa Chambers (Mayo, Fianna Fail) | Oireachtas source

I thank the Chairman for his indulgence and I appreciate having the opportunity to ask a question beyond the local property tax.

The IFAC report on the potential impact of a no-deal Brexit, which is more possible now than before, makes for quite sobering reading. The Minister is correct that the position is changing by the hour. Seamus Coffey and his team were present for the earlier part of the meeting. Their report indicates that a significant fiscal adjustment will be required, along with significant spending cuts or tax increases to stop Ireland’s debt ratio from spiralling in the event of hard Brexit. I asked Mr. Coffey what level of adjustment would be required in such an event. His response was it would be a €4 billion adjustment in one year and that it could be broadened out to €5 billion over a three-year period. Has the Minister done any planning in respect of how he might cope with such a significant adjustment to the public finances in the space of 12 months? Has the Department done anything to address the impact of the fluctuations in the value of sterling? Even today, the exchange rate is nearly 90 p to €1 and this is already having an impact on businesses. There was an assumption that it might fall back to 85 p to €1.

The secretariat provided a table, based on the IFAC report, on the baseline scenario for the budget balance compared with the ESRI and the Central Bank projections. The latter two vary. The Central Bank forecasts for a hard Brexit are far more miserable but the ESRI forecast is just as distressing.

It shows that in the event of a hard Brexit, instead of having a surplus of 0.6% of GNI we could be looking at a deficit of -4.7%, according to the Central Bank or -0.2.3%, according to the ESRI. If we track forward to 2022 and 2023, it is the same level of forecasting in that we had hoped for a surplus in those years, on the baseline scenario, but we are looking at a deficit now of at best -0.4% and, at worst, -2.8%. The Minister identified 2022 and 2023 as the years in which the most significant spending on the national broadband plan will be required. If there is a hard Brexit, it would make that level of spending for that particular capital investment almost impossible. I would like to hear the Minister's views on that.