Pearse Doherty (Donegal, Sinn Fein)
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89. To ask the Minister for Finance the fiscal space available in budget 2017; and if he will make a statement on the matter. [5175/16]

Pearse Doherty (Donegal, Sinn Fein)
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91. To ask the Minister for Finance the effect of non-indexation of the universal social charge on the fiscal space between 2016 and 2021. [5177/16]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 89 and 91 together.

Estimates of the fiscal space for the period 2017 to 2021 were provided in the documentation accompanying the Budget last October.  These remain the most up-to-date estimates.  On this basis, after providing for pre-committed expenditure (demographics, pay increases under the Lansdowne Road Agreement, expenditure increases as part of the Public Capital Programme), net fiscal space for 2017 was estimated at around €500 million.

It is important to stress that the various inputs required to calculate the fiscal space (such as forecasts for the GDP deflator) can, and will, change.  This, in turn, will alter the fiscal space.  Any decision on when to publish revised estimate of the fiscal space will be a matter for the Government. 

It was estimated at the time of Budget 2016 that an annual decision not to index the tax system could potentially add a further €2 billion to the level of fiscal space over the period 2017 to 2021; these figures were also set out in the Budgetary documentation.  In relation to this additional €2 billion of fiscal space, some €500 million was apportioned to the Universal Social Charge.  These figures will be reviewed as part of the forthcoming Stability Programme Update, which will incorporate the latest economic and fiscal data and must, in turn, be approved by the Government before it is submitted to the European Commission.

Finally, I would stress that any decision regarding indexation of the tax system is, of course, a matter for the Government.