Richard Bruton (Dublin North Central, Fine Gael)
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Question 127: To ask the Minister for Finance the desired breakdown between spending and taxation of the proposed €2 billion reduction in the current Exchequer deficit in view of the draft public service agreement. [17311/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Budget 2010 sets out a consolidation path for the public finances aimed at reducing the General Government Balance to below -3% of GDP by end-2014. The required adjustment in each year over the period is set out in the budgetary documentation. Based on the overall macroeconomic and budgetary forecasts an adjustment of €2 billion relating to current expenditure and/or tax revenue adjustments will be needed in 2011. The precise breakdown of this adjustment is a matter for ongoing determination in the context of my formulation of Budget 2011. While at this stage of the year, I do not intend to comment on the specifics of the 2011 budgetary policy, I did, in Budget 2010, outline a number of areas for consideration in this context. Furthermore, the report of the Special Group on Public Sector Numbers and Expenditure Programmes, the work currently underway regarding Local Authorities and the report of the Commission on Taxation will also have a role to play in the determination of future budgetary policy.

The draft Public Service Agreement provides certainty and stability for public service workers in terms of pay and conditions over the period of the Agreement while providing a sustainable framework to the Government for the agreed delivery and cost of public services over the medium term which will assist in the restructuring and planning of the public finances. Adoption of the Agreement will itself give a measure of certainty about policy and spending that will assist in the process of economic recovery.