Joe Higgins (Dublin West, Socialist Party)
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To ask the Minister for Finance his views on the Nevin Economic Research Institute estimate that 29,000 jobs will be lost if he proceeds with a fiscal adjustment of €3.5 billion which prioritises cuts in government spending. [42255/12]

Michael Noonan (Limerick City, Fine Gael)
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Firstly, I want to assure the Deputy that all of the economic policies of the Government are designed with one main objective: that is to restore balanced economic growth so that employment can increase once again. A precondition for a resumption of balanced economic growth is sustainable public finances. As such the Government is committed to cutting the deficit and maintaining debt at sustainable levels. However, the objective of Government has been to ensure that any consolidation necessary is implemented in a credible manner, while seeking to minimise the impact on the economy and the labour market. In line with the economic literature and the broad consensus amongst various economic agencies - including the IMF, the ESRI and the Fiscal Advisory Council - we believe the most effective and growth friendly way to implement such consolidation measures is by concentrating the majority of the adjustments on the expenditure side.

Looking forward to Budget 2013, the Government believes a continuation of this focus on expenditure cuts is necessary to limit the negative impact on the economy and the labour market. Consequently, two-thirds of the forthcoming adjustment is expected to be realised from the expenditure side.

It should be acknowledged that while restoring the public finances to a sound footing is crucial for Ireland’s future, consolidation will have a negative short-run impact on the economy. Of this there is no question. However, it is the framing of this consolidation which is important and I want to assure the Deputy that the Government is conscious of the need to minimise the impact of consolidation on the labour market.

In the wake of Ireland’s recent return to the bond markets it may be easy to forget the considerable progress that has been made in getting to this point. It is imperative now that the hard yards gained in the recent past are not in vain and that those measures are followed through in order to restore confidence in the Irish economy and successfully navigate Ireland’s exit from the current EU/IMF programme.