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

As I have stated in recent days, it is important to note that some aspects of the promissory note deal are yet to be finalised. For example, the liquidator is in the process of overseeing a valuation and sales process for the assets of IBRC, while the final payments made under the eligible liabilities guarantee, ELG, scheme have not yet been determined.

Nevertheless, simulations run by my Department estimate that the general Government deficit will improve by approximately €1 billion per annum over the coming years which will bring us €1 billion closer to attaining our 3% deficit target by 2015. However, this has to be seen in light of the estimated general Government deficits of €8.9 billion and €5.3 billion in 2014 and 2015 respectively, as per budget 2013.

While this agreement is a significant step forward in restoring sustainability to our public finances, the Government is well aware there remains a considerable gap between what we get in revenue and what we spend. This situation is not sustainable over the longer term. In addition to the requirements to bring our deficit to under 3% of gross domestic product by 2015 as per the excessive deficit procedure, EDP, it makes sense that we bring balance back to the public finances and stabilise and reduce our debt burden.

As we are only two months into the year, I will not be drawn into speculation on the composition of the next budget and the impact this deal will have on it. There are many other moving parts to be considered such as economic growth, tax take and expenditure performance. All of the above, including the impact of the promissory note deal, will form the basis of the Government's decisions regarding the budget.

Assessing the impact of the promissory note agreement on future budgetary adjustments, in isolation from other developments since the time of budget 2013, would not be a constructive or informative exercise. The State has experienced a number of significant developments since the publication of the budget including the sale of contingent capital notes in Bank of Ireland, the sale of Irish Life which represented the first time during the crisis that a company in which we have invested has been returned fully to private ownership, and the encouraging tax revenue performance in December 2012.

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Irrespective of the above, I am sure the Deputy is well aware that the Government recognises that improving labour market conditions represents its most important challenge and, accordingly, is giving priority to job protection, job creation and supporting the unemployed. In this regard, the Minister for Enterprise, Jobs and Innovation recently published the 2013 Action Plan on Jobs, which seeks to address this important challenge. Further, I draw the Deputy’s attention to yesterdays QNHS release. Yesterday’s figures are encouraging, with employment increasing over the year for the first time since Q2 2008 and unemployment maintaining its downward trajectory, and give further weight to the consensus that Ireland’s labour market has now bottomed-out. While caution must always be taken in reading too much into the quarterly figures, the broad trend is positive.

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