Michael McGrath (Cork South Central, Fianna Fail)
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153. To ask the Minister for Finance the fiscal space that will be available in each of the next five years following the publication of the Exchequer returns for 2015; and if he will make a statement on the matter. [1890/16]

Michael Noonan (Limerick City, Fine Gael)
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The projected fiscal space figures published in Table A8 on page C.50 of the Budget 2016 book are consistent with compliance with our obligations under the expenditure benchmark.  Fiscal space is calculated in line with the trend potential growth rate of GDP less a convergence margin that applies as Ireland is not yet at its medium term budgetary objective under the balanced budget rule.  It should be noted that changes in revenue levels are not relevant to the calculation of fiscal space unless it arises from a discretionary policy decision. Additional revenue arising from discretionary measures increases the overall fiscal space while the converse in relation to revenue reductions also applies.  

The medium term fiscal space projections set out in Budget 2016 are not final as they are based on projections for the GDP deflators, reference rates, convergence margins and general government expenditure outturns for each of the relevant years. The actual GDP deflators, reference rates and convergence margins values used to assess compliance with the rules each year will be set by the European Commission using their estimates compiled in their Spring and Autumn forecasts. The general government expenditure values used to evaluate adherence to the rules will be the final Central Statistics Office (CSO) estimates from the National Income and Expenditure (NIE) and Government Finance Statistics (GFS).

Although 2015 tax revenue was ahead of expectations due to overall economic growth and buoyancy, it will not impact on the fiscal space available for 2016 and subsequent years. 2015 Exchequer spending, which is the largest component of general government expenditure, was in line with Budget day projections and will have little impact on the availability of fiscal space. 

The first official estimates for general government expenditure for 2015 will be compiled by the CSO for the end March 2016 Excessive Deficit Procedure (EDP) transmission to EUROSTAT. Following on from this and the next iteration of the European Commission's forecasts in February, revised projections of fiscal space for the next five years will be published by my Department in the Stability Programme Update 2016.