Pearse Doherty (Donegal, Sinn Fein)
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149. To ask the Minister for Finance his plans to rework the ten-year average growth calculation in view of his decision to limit ability to spend in future years not being necessary under the fiscal rules (details supplied); and if he will make a statement on the matter. [25554/17]

Michael Noonan (Limerick City, Fine Gael)
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The expenditure benchmark is designed to ensure that spending increases are made on a sustainable basis and not based on one-off factors.  In other words, the objective of the benchmark is to avoid repeating the mistakes of the past which ultimately resulted in the collapse of the public finances in Ireland.  

The 26 per cent growth rate recorded in 2015 was a one-off, largely caused by the on-shoring of highly mobile intellectual property assets.  These assets could just as easily be moved off-shore at the stroke of a pen.  

To base budgetary policy on such a one-off factor would be highly irresponsible and risk repeating the mistakes of the past.    

This one-off, 26 per cent growth rate is contaminating the ten-year average growth figure and it is appropriate that adjustments are made.  In this context, my Department's estimate (set out in Budget 2017) is essentially based on taking the average of the preceding year (2014) and the succeeding year (2016) in order to compile an appropriate ten-year average.  This is effectively the same approach adopted by the European Commission in its assessment of Ireland's Stability Programme and the way it has adjusted the reference rate to be used in the expenditure benchmark calculation for 2018.

I would point out that compliance with the fiscal rules also takes into account the structural balance pillar.  The Government's objective since exiting the corrective arm of the Stability and Growth Pact has been to achieve a structural balance by 2018.  This remains the Government's target.

In summary, the Government will not jeopardise the sustainability of the Irish public finances and the ongoing economic recovery by adopting an inappropriate budgetary stance.