Brendan Smith (Cavan-Monaghan, Fianna Fail)
Link to this: Individually | In context

Question 47: To ask the Minister for Public Expenditure and Reform his views that the recommendation of the Central Bank of Ireland to make a bigger budget adjustment to public expenditure than agreed with the EU-IMF is the correct action to take; and if he will make a statement on the matter. [28534/11]

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

The General Government deficit target for 2012, as set by the ECOFIN Council in December 2010, is 8.6% of GDP. The Government is fully aware of the importance of achieving this target in the context of the 2012 budget as well as the views of those who have called for a more ambitious deficit target. The Government is currently examining all options as regards the required consolidation in 2012, including the results of both the comprehensive review of expenditure and the capital review. In addition, both my Department and the Department of Finance are currently in the process of assessing what implications the latest budgetary and economic data might have for 2012 and beyond. Such assessment will, along with other data, inform Government in the context of its budgetary preparations over the coming months.

The next step in this process is to publish an estimate of the 2012 deficit and the level of budgetary adjustment required to meet our deficit reduction target. That will be done at the end of the month in the pre-budget outlook.

Seán Fleming (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

The Minister made no reference in his response to the matter I raised regarding his views on the recommendation made by the Central Bank of Ireland. It suggests that the opportunity exists now to consider a bigger budget adjustment to public expenditure than agreed with the EU-IMF.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

I will deal with that in the supplementary reply.

Seán Fleming (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

The Minister might give me his views on that. I know there may be scope, but I caution against making any cuts that are not needed. We have a good programme. There are always some people who are tempted to go harder, faster and deeper and that may be a positive outlook, but there are downsides. There is a limit to the pain people can take and the Minister should take heed of that.

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

There is a lot of wisdom in what the Deputy said. The target we have to achieve next year is 8.6% of GDP. The problem is we have not quantified exactly the level of adjustment, both in term of expenditure reductions and taxation measures, that will get us to that. We cannot do that until we see, later in the year, the outturn figures from the State revenue and get a clear picture on the growth projections for next year.

I am inclined to agree with the Deputy. Forensically, nobody in this House is in a better position than me to know the consequences of cuts following the process I have been involved in over the past number of weeks. There is no pain-free measure that can be taken. We must get the balance right. The over-arching imperative for the Government is to achieve a deficit of no greater than 8.6% of GDP next year.