Brian Lenihan Jnr (Dublin West, Fianna Fail)

I am aware of the suggestion made by the Governor of the Central Bank, Professor Patrick Honohan, both in an address on 20 September last and in his comments earlier today, that reprogramming of the budgetary profile over the coming years will be necessary. To ensure that sustainability is restored to the public finances, the Government set out in budget 2010 a multi-annual fiscal consolidation framework to reduce the general Government deficit to less than 3% of GDP by the end of 2014.

Significant action has already been taken in regard both to expenditure and taxation in order to restore sustainability to the public finances. Between July 2008 and the supplementary budget in April 2009, adjustments designed to yield approximately 5% of GDP in 2009 were introduced. Budget 2010 delivered a further adjustment, mainly on the expenditure side, of €4 billion or 2.5% of GDP. Therefore, the cumulative correction to date has been 7.5% of GDP.

The most recent Exchequer returns covering the period to the end of August show that the Government's actions are having a positive effect, with the overall Exchequer position broadly in line with expectations. The target of raising €20 billion from the bond markets in 2010 has now been achieved and, taking account of the funding already completed this year, cash balances, retail debt and longer-term funding carried over from last year, Ireland is funded through to the middle of next year.

I stress once again that the Government remains fully committed to meeting the target of having a deficit below 3% of GDP by the end of 2014. As I said in my statement on banking this morning, it is important that we have a credible path to show how we propose to meet this commitment. Work is under way on a four-year budgetary plan that will set out the annual measures required to restore order to the public finances and bring our deficit below 3% of GDP by the end of 2014.

I expect the Governor of the Central Bank will shortly forward to me his usual pre-budget outlook, and this, along with the most up-to-date economic and fiscal data, will be taken into account in the Government's deliberations in the run-up to the publication of the new four-year budgetary plan in early November.

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