Written answers
Thursday, 23 June 2016
Department of Finance
Budget Targets
Bernard Durkan (Kildare North, Fine Gael)
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98. To ask the Minister for Finance the extent to which budgetary projections remain on target for the balance of the current year; the extent to which he expects any adjustments to be required in 2017; and if he will make a statement on the matter. [17762/16]
Michael Noonan (Limerick City, Fine Gael)
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The Summer Economic Statement (SES) was published earlier this week and is currently being debated in the Oireachtas. The fiscal forecast contained in the SES has been updated for a number of budgetary developments. Since publication of the 2016 Stability Programme Update, the allocation for voted expenditure has increased by €540 million. This allows for an expenditure increase in the areas of Health, which is receiving €500 millon, and Justice, which has been allocated a further €40 million. Also in the interim, the tax revenue performance has been strong and at end-May 2016, receipts were up €774 million or 4.3 per cent above profile, which represents a 9.0 per cent (€1,549 million) increase when compared to same period in 2015. This solid performance was reviewed as part of the 2016 Summer Economic Statement and it was decided that the strong performance facilitates an increase of c. €900 million in this years tax forecast.
This more than offsets the increase in voted expenditure and helps to improve the estimate of the general government deficit for 2016 from 1.1% of GDP to 0.9% of GDP. However, I should point out that not all of the additional tax revenue received to date is of a recurring nature and therefore will not enter the tax base for 2017.
In terms of 2017, the SES estimates that fiscal space of €1 billion will be available and this has been allocated to expenditure increases and tax reductions, in the fiscal forecast, on a 2:1 basis. This is in line with the Programme for Partnership Government.
A further update to the forecasts for 2016 and 2017 will be contained in the Budget 2017 booklet using the most up to date macroeconomic and fiscal information available at that time.
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