Brian Lenihan Jnr (Dublin West, Fianna Fail)

The broad parameters for the budget for 2010 were set out in the supplementary budget which for the first time set out a multi-annual plan to achieve a general Government deficit of 3% of GDP by the middle of 2013. In terms of the next two years, the supplementary budget set out the indicative split between the necessary further expenditure and tax revenue adjustments required, amounting to up to €4 billion in 2010 and 2011. At the time, I indicated that the expenditure targets were a minimum and the taxation targets were a maximum and I have since elaborated on this to indicate that the scope for further income tax increases is limited. This will mean that other measures that broaden the tax base and further improve the expenditure position are central to the ongoing fiscal consolidation process. It is not clear that further broadening of the tax base will add in a significant way to the amount of revenue that can be raised to meet the necessary targets.

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 an important role to play in identifying measures that will achieve the required adjustments for 2010 and subsequent years, as set out in the supplementary budget.

The report of the special group will assist the Government to identify economies which can be made on the scale necessary to ensure that the public finances are returned to a sustainable path as soon as possible. The special group's conclusions will accordingly be considered on an ongoing basis in the context of preparing the allocation of expenditure this year and for next year.

In relation to the commission on taxation, its terms of reference are far reaching and broadly defined and as Deputies know they allow for consideration of all aspects of the Irish taxation system. The work of the commission will help establish the framework within which tax policy will be set for the next decade at least. I expect to receive the report of the commission shortly and I will bring it to Government for consideration at that stage.

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. In this context, my Department will produce updated macro-economic projections which will inform the decision-making process for the December budget. The pre-budget outlook will assist the House by informing the debate in the run-up to the presentation of the budget. I will then set out the details of the budget for 2010 in my address on budget day in early December and the budget will also contain updates to the medium-term economic and fiscal projections.

As the Deputy is aware there is ongoing engagement with both Houses as well as the various committees, in relation to economic and fiscal matters. I have no reason to believe the situation will be any different in the lead-up to the presentation of the budget for 2010.

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