Tommy Broughan (Dublin Bay North, Independent)
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116. To ask the Minister for Finance his Department's role in preparations for Brexit; if a detailed sectoral analysis of the economy has been carried out to examine the possible or likely impacts on tax revenue from the UK leaving the EU; and if he will make a statement on the matter. [34221/16]

Michael Noonan (Limerick City, Fine Gael)
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My Department been to the fore in terms of producing and funding relevant analysis on the Irish economic and budgetary impact of 'Brexit'.

Outputs include a scoping study produced by the ESRI last year under our joint research programme, initial short-term (i.e. for next year) estimates published in the Summer Economic Statement, an analysis of the possible sectoral and regional impacts of Brexit arising from Ireland's trade relationship with the UK, published with Budget 2017, and a joint research paper with the ESRI modelling the medium to long term macroeconomic impact of 'Brexit'.

The sectoral analysis shows that those most exposed to the UK are generally comprised of indigenous enterprises that are small in scale, are concentrated in food and manufacturing industries, have relatively low profit levels and have a disproportionate concentration of employment in regional and rural labour markets. Budget 2017 laid out an extensive range of policies targeted at these exposed sectors.

In relation to the impact on tax revenue the joint work with the ESRI has estimated that over the medium to long term the government debt and deficit ratios are expected to worsen by 10.8 percentage points and 1 percentage point, respectively, after 10 years in the event of the UK entering a World Trade Organisation relationship with the EU. I would stress that these are determined on a 'no policy change basis'. With these potential adverse outcomes in mind Budget 2017 sought to build up Ireland's buffers to any 'Brexit' fallout. Accordingly the Government has decided to set a new domestic target of a debt to GDP ratio of 45 percent to be reached by the mid-2020s, or thereafter, depending on economic growth. Further measures will be introduced over time once there is greater clarity on the exact timing of the UK's exit as well as the post-exit relationship between the EU and the UK.