Brian Cowen (Laois-Offaly, Fianna Fail)

I assume that when the Deputy mentions Irish and European accounting procedures, he is referring to the Exchequer accounts and the general Government accounts, respectively.

The published finance accounts show that the Exchequer current account surpluses for the years 1998 to 2004 inclusive were as follows: 1998, €2,649 million; 1999, €4,367 million; 2000, €6,971 million; 2001, €4,724 million; 2002, €5,400 million; 2003, €4,410 million; and 2004, €5,619 million.

The general Government balance is a broader measure of the fiscal performance of Government. In addition to the Exchequer, it includes local authorities, non-commercial State sponsored bodies, the national pensions reserve fund and the social insurance fund. It also includes elements of accrual accounting while the Exchequer balance is a cash-based measure. On a general Government basis, the current account surplus for each of the years in question was: 1998, €3,471 million; 1999, €6,039 million; 2000, €8,011 million; 2001, €5,828 million, 2002, €4,272 million; 2003, €4,975 million; and 2004, €6,713 million.

The current surpluses on Exchequer account have been used to meet existing and future needs. For example, investment in capital infrastructure has been increased in recent years to around 5% of GNP per annum, twice the EU average. Capital expenditure is funded, in whole or in part, by current surpluses.

The national pensions reserve fund, established in 2001, requires the statutory investment of 1% of GNP annually, to meet part of the escalating costs of social welfare and public service pensions. The current surpluses meet the cost of the 1% contribution. The surpluses are used to reduce the national debt, thereby freeing resources to fund other priority areas. Debt as a percentage of GDP has fallen to below 30%.

The planned budgetary policy stance is to continue with our prudent management of the public finances and keep them in a sustainable position to ensure that room for manoeuvre exists to provide and enhance public services now and in the future.

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