Bríd Smith (Dublin South Central, People Before Profit Alliance)
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91. To ask the Minister for Finance his views on the last minute expansion of the so-called fiscal space by some €300 million for the 2017 budget and its implications for next year's spending; and if he will make a statement on the matter. [30932/16]

Michael Noonan (Limerick City, Fine Gael)
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The increase in the fiscal space between the amount forecast in the Summer Economic Statement (SES) 2016 and final amount in the Budget 2017 document was some €200 million, not €300 million.

The €1 billion fiscal space in the Summer Economic Statement (SES) was funding a proposed Budget package of €1.2 billion in 2017 consisting of additional expenditure worth €860 million and tax reductions worth €330 million. A Budget package worth more than the available fiscal space is possible due to the effect of four-year capital smoothing, where only one quarter of the increase in capital expenditure must be funded in the first year from within the fiscal space.

The final Budget package announced for 2017 was worth €1.3 billion, so the additional increase vis-a-vis the SES was €100 million.

The actual package consisted of net tax reductions worth €295 million and additional spending worth €1 billion.  This consisted of about €800 million for current spending and €200 million for capital spending.

The difference between the €200 million increase in fiscal space and the €100 million package increase between the SES and the Budget arises because the Government increased capital expenditure this year by €200 million, to address flood damage and school building, utilising €50 million of the fiscal space available for 2017 and the split between current and capital increases was altered.

Finally I would point out that the 'walk' from €1 billion to €1.2 billion of fiscal space is described in Box 1 "Evolution of 'fiscal space' in 2017" in Chapter 3 of the Economic and Fiscal Outlook section of the Budget 2017 book.