Michael Noonan (Limerick East, Fine Gael)
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Question 86: To ask the Minister for Finance his understanding of the commitment in the EU/International Monetary Fund programme of financial support for Ireland that any additional unplanned revenue must be allocated to debt reduction; and if he will make a statement on the matter. [1304/11]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Under the terms of the programme of financial support which we have agreed with our European partners and the IMF, there is a recommendation that we should introduce a fiscal rule such that any additional unplanned revenues which arise will be allocated to deficit and debt reduction. In Budget 2010, published in December 2009, it was outlined that as part of the ongoing reform of the budgetary process, consideration would be given to the use of surplus once-off revenues which arise in future years to reduce the deficit and thereby contribute to reducing the debt burden. In practical terms, this means that any bonus or surplus revenues generated above what was forecast should not be used to allow expenditure to increase above the level budgeted for while still recording a deficit in line with that originally projected. Instead, they should be used to reduce the deficit and hence the debt burden.

Given the large deficit that currently exists in the public finances and the sharp increase in the level of national debt in recent years which has required an ever increasing share of tax revenues to be used to service the national debt, this is a sensible course of action and one that the Government was examining in any event, as outlined in Budget 2010. Such an approach assists in the restoration of sustainability to the public finances in as short a period as is feasible.