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

The actual measures will be announced in budget 2016. The tables in the spring statement are based on a general split of €1.2 billion, but I expect that by October's budget this will be €1.5 billion. Current indications are that a similar amount of space will be available in later years while still ensuring the achievement of a balanced budget before the end of the decade.

We must continue to reduce the national debt. The budgetary strategy we are pursuing will ensure that our debt levels continue to fall and that we are well positioned to withstand any shocks that may occur in Ireland, Europe or the global economy. The Government has been working hard to reduce the burden of this debt and that remains a key priority. We have succeeded in reducing the interest rate on the European loans provided under the programme, secured agreement to extend the maturity of the European loans, replaced the promissory notes with very long-dated government bonds, and replaced just over €18 billion of IMF loans with cheaper market-based funding.

National debt peaked in 2013 and is now on a firm downward path. It is expected to drop below 100% of GDP and move towards the European average in a couple of years. Our net debt, taking account of cash the NTMA is holding and other assets, is of course much lower. The figures for debt which I have given are figures for gross debt. The cost of servicing the debt has also reduced. Interest rates on ten year Irish Government paper are below 1%, the lowest ever, and Irish Government debt is now classified as investment grade by all the main credit rating agencies.

We are now in a much better position. Going forward, the fiscal rules require an annual reduction in the debt ratio by one twentieth of the difference between the actual level and 60 per cent of GDP. Contrary to what some of the Opposition have stated, this will not require further consolidation by way of tax increases and expenditure cuts. This is because, with a growing economy, the debt-to-GDP ratio will fall once we run prudent fiscal policies. In other words, growth will do the heaving lifting.

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