Dara Calleary (Mayo, Fianna Fail)
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20. To ask the Minister for Finance his estimate for the fiscal space in 2017 and 2018; the factors which may cause this to change prior to budget 2017; and if he will make a statement on the matter. [13036/16]

Michael Noonan (Limerick City, Fine Gael)
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The current estimates of the net fiscal space available for 2017 and 2018, are €1 billion and €1.2 billion respectively. These are published in Table 2 on page 15 of the Summer Economic Statement and are consistent with compliance to our obligations under the expenditure benchmark which calculates fiscal space in line with the potential growth rate of GDP less a convergence margin as Ireland is not yet at its medium term budgetary objective of a structural deficit of 0.5 per cent of GDP. It should be noted that revenue is 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 fiscal space projections in the Summer Economic Statement are not final and are likely to change between now and Budget 2017 as they are based on a number of moving parts. These include GDP deflators, reference rates and convergence margins set each year by the European Commission and general government expenditure values produced by the Central Statistics Office (CSO) for the National Income and Expenditure (NIE) and Government Finance Statistics (GFS).

For 2017 the reference rates and convergence margins were set by the European Commission in their Spring forecast in May and will not change. However the GDP deflator used is an average of the Commission's Spring and Autumn deflators. As the Autumn deflator will not be finalised until after Budget 2017, a forecast will be produced by my Department to use in Budget projections. Similarly a final outturn for government expenditure in 2016 will not be available. However any changes to the profile of Exchequer spending in the meantime or revisions to the 2015 outturn in the CSO's Autumn EDP return will result in an update to my Department's forecast of the 2016 expenditure base.

For 2018 none of the inputs required will be known for Budget 2017. However any changes to 2016 and 2017 variables will result in revisions to the variables forecast by my Department for use in 2018 fiscal space calculations.