Written answers
Thursday, 7 July 2016
Department of Finance
Irish Water Funding
Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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87. To ask the Minister for Finance for details of the treatment of the debt portion of the Irish Water capital programme, for each of the years 2015 to 2021, in terms of how it impacts on the State's debt to gap ratio, and the calculation of the expenditure benchmark and fiscal space available to the Government in each of those years. [20246/16]
Michael Noonan (Limerick City, Fine Gael)
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I presume that the "debt portion of the Irish Water capital programme" mentioned by the Deputy in his question refers to the direct borrowing undertaken by Irish Water from commercial sources. As Irish Water is classified in General Government, this commercial borrowing is included in the General Government Debt (GGD). By end 2015, Irish Water's commercial borrowings increased General Government Debt by about 0.4% of GDP. Under Irish Water's business plan, this is forecast to increase to about 0.6% of GDP by 2021.
The source of funding for Irish Water's capital programme has no impact on the calculation of the expenditure benchmark and fiscal space available to the Government in the period 2017-2021.
Furthermore the calculation of the net fiscal space remaining in table A2, Annex 1 of the Summer Economic Statement 2016 includes the full impact of Irish Water's planned expenditure, including its capital programme. The principal impact this expenditure has on the calculation is its inclusion each year in the general government expenditure base used to estimate fiscal space in the coming year.
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