Mary Lou McDonald (Dublin Central, Sinn Fein)
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2. To ask the Minister for Public Expenditure and Reform his views on the quantum of adjustment in public expenditure required in budget 2015; and if he will make a statement on the matter. [29846/14]

Mary Lou McDonald (Dublin Central, Sinn Fein)
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My question relates to the forthcoming budget which is only three months away. We are coming to the end of this Dáil session and I would like the Minister to set out the extent of cuts he envisages in the forthcoming budget. Will he set out where the Department is at in budgetary planning?

Brendan Howlin (Wexford, Labour)
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The Government's fiscal target for 2015 has been well signalled. It is to bring the general Government deficit below 3% of GDP, in line with the commitments made by the country under the excessive deficit procedure. The budget to which the Government will agree in October will be designed to meet that target and will reflect the up-to-date economic and fiscal outlook.

The Deputy will be aware that the most recent official budgetary estimates are contained in the stability programme update published in April. At the time it was estimated that a consolidation package of €2 billion would be necessary next year to deliver a deficit of 2.9% of GDP. There have since been some positive developments which have been welcomed by all. The Exchequer returns for the first half of the year represent a solid performance in terms of tax and expenditure. Tax revenues are growing and, in overall terms, expenditure on public services is within the budget parameters set out last year. Last week the Central Statistics Office announced an upward revision of the level of GDP for last year. This will have a favourable impact on our deficit-to-GDP ratio for this year and next. The GDP growth reported for the first quarter of the year is also encouraging. We expect all of this to ease the level of fiscal adjustment needed to meet our 2015 deficit target. The precise impact is being assessed and will form a critical element of the Government's announcements on budget day.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I am sure the Minister is aware of the impact the recent series of austerity budgets has had on service levels and on people's capacity to spend, plan and budget for their own households and lives. It seems from the soundings from the new Tánaiste and leader of the Labour Party, whom I congratulate on her new positions, that she is also aware of this. While I appreciate that the Minister cannot provide exact figures, I find it hard to believe that a matter of weeks away from the budget, he cannot give us some sense of the magnitude of the cutbacks that are envisaged. I welcome his statement that a €2 billion cutback might not be necessary, but I would like him to go much further than that by providing some specific details and assuring the House that further cutbacks will not be made in areas such as health and education and that people who rely on social welfare payments and have fixed incomes will not lose out.

Brendan Howlin (Wexford, Labour)
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Every decision that was made in advance of the budgets of the last three years, as delivered by the Minister, Deputy Noonan, and me, was aimed at repairing an economy that was calamitously broken. Objectively, we have done a good job in building a sustainable platform for future expenditure and the future well-being of the Irish people. On each occasion, we made decisions that were the least worst options available and would have the least worst impact on the most vulnerable people. We have done that by protecting core social welfare rates, for example. I am glad that these determined and difficult decisions have led us to have a platform now. As I am not a fortune teller, I do not know what will happen in the next number of months. However, I am confident that we will not require budgetary adjustments of anything like the order specified in the most recent medium-term economic forecast to reach the target of a deficit-to-GDP ratio of less than 3% of GDP. We will spell out the details of that when all the data is available towards the budget day in October.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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The Minister is certainly not a fortune teller, but he is the Minister for Public Expenditure and Reform. His Government colleagues, including the Minister for Finance, might believe him when he says "objectively, we have done a good job" of protecting the most vulnerable people in society, but that is not the experience on the ground. The budgets that have been delivered by this Government so far have impoverished sections of the community. Many people have been left with no option other than to leave by boarding the emigrant planes to Sydney, the United States and further afield. I welcome the Minister's assertion that the overall level of cuts will not be of the order of €2 billion. Reading between the lines, the Minister is insinuating that it will be much less. Does that mean the proposed adjustment will be halved? I would like the Minister to be more specific, because people deserve some level of certainty in their lives as they plan their budgets heading into the autumn. I remind the House that this should not just be a case of scaling back the cutback agenda. An effort has to be made to begin to repair the damage that the Minister and his colleagues have inflicted on families and low-income workers in the succession of budgets over which they have stood.

Brendan Howlin (Wexford, Labour)
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Rather than responding to the views of the Deputy, who has been far from objective from the beginning, I will leave it to a more objective person to make a determination on whether our budgetary strategy has been successful.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Is the Minister referring to someone like the Minister for Finance, Deputy Noonan?

Brendan Howlin (Wexford, Labour)
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If we had followed the path recommended by the Deputy's party leader, which involved defaulting on our debts, we would be in a worse position than Argentina is in 20 years after its default. Our people would be impoverished, we would have no inward investment and it would be impossible for this country to borrow money anywhere at anything like reasonable rates of interest. It is interesting to note that our ten-year bond yield yesterday was 2.3%, which is below the capacity of Britain to borrow money. I think that is a testament to how far we have brought the country in the last three years. The Deputy is right when she says that many people are desperately squeezed. We know that. We want to give as much support, help and money back to people as is possible, consistent with our determination to have a sustainable platform on which this country can thrive into the future.