Michael McGrath (Cork South Central, Fianna Fail)
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To ask the Minister for Finance in the context of the circa €1 billion improvement in the general Government balance as a result of the deal on the promissory notes and provided all other economic indicators remain in line with the projections made in Budget 2013, his views on whether the planned adjustment in Budget 2014 can be reduced and additional money invested in job creation initiatives as a result of the gain. [10831/13]

Michael Noonan (Limerick City, Fine Gael)
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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.

Michael McGrath (Cork South Central, Fianna Fail)
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I thank the Minister for his reply. As he knows, I welcomed the benefits from the promissory note deal. As he acknowledged in his reply, the projections are that it will result in savings of €1 billion on the general Government deficit. I did not expect him today to indicate the planned €3.1 billion adjustment for 2014 would be now €2.1 billion. I also accept there are variables with economic growth, taxation receipts and spending in line with the budget.

However, the Minister for Finance can give an indication that it is his belief that the benefits from that deal will have an impact on the budget. The Labour Party Ministers have been running around the place telling everyone who will listen that the deal will have an impact on the budget for next year but the Minister for Finance is not saying the same thing. I am simply asking whether it will have an impact on the budget. My view is that we should be using the benefits, all other things being equal, to reduce the adjustment for 2014 and to invest additional money in job creation initiatives. That is the Fianna Fáil position. I am asking whether the Minister has a position and whether he believes it will have an impact on the budget.

Michael Noonan (Limerick City, Fine Gael)
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It is always easy to prescribe ways of spending extra money. After two years of very hard work we are getting the economy back into a position where it is growing again and where many of the indicators are pointed in a positive direction. It is only February. Over the years Ministers for Finance have not speculated about the budget, even within two months of it. To ask me to speculate about what provisions may be in the budget in February when there will be no budget until October at the earliest, in line with the two-pack, is not a reasonable request.

Anyway, the position has improved and the deal on the promissory note has brought about a situation where, all other things being equal, tax increases and public expenditure totalling up to €1 billion will not be required to be made as part of the adjustments necessary to get to the 3% target by 2015. Let us consider the recently negotiated wage agreement. There is €1 billion in that but it has not been put to the members yet. There are many moving parts.

Michael McGrath (Cork South Central, Fianna Fail)
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There are several moving parts but the Government can indicate a statement of principle. The Government could state that it believes the benefits of the deal should be extended to the public, that there should be a dividend to people and that people should be given some form of relief. The Minister is saying he cannot speculate and I realise that is the traditional position of Ministers for Finance. However, other colleagues in government have been categoric in stating that the deal will have an impact on the budget next year and that people will feel the difference. I have a duty as an Opposition spokesperson to put that question, albeit many months before the budget. At a minimum the House can give an indication that this deal is valuable and that it will result in a difference in the budget for next year. That is the question I am putting forward.

Michael Noonan (Limerick City, Fine Gael)
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I have already said to Deputy McGrath that it improves the budgetary situation by €1 billion between now and 2015. Obviously, if it improves the situation by €1 billion between now and 2015 then unless something disastrous happens the public will see the benefit of that improvement over the course of the budgets.

Deputy McGrath is going down the road which got his party into trouble previously. As soon as they see a little money they want to go out and promise the people suddenly that they will spend it, that they will be back, that they will have a lash and that the nice people of Fianna Fáil will spend money and get people back to work.

Michael McGrath (Cork South Central, Fianna Fail)
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It is not about spending it. It is about giving people relief.

Michael Noonan (Limerick City, Fine Gael)
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Deputy McGrath should be very careful. It is what destroyed his party. He should not destroy it a second time.

Michael McGrath (Cork South Central, Fianna Fail)
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The Minister needs to start telling his Government colleagues that.

Michael Noonan (Limerick City, Fine Gael)
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Do not destroy it a second time.