Pearse Doherty (Donegal, Sinn Fein)
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261. To ask the Minister for Finance if he will confirm media reports that there is €200 million in net fiscal space available for 2018 and €3 billion of fiscal space to 2021; and if he will make a statement on the matter. [27367/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy is aware the most recent estimate of the net fiscal space available for 2018 is €1.2 billion (The gross fiscal space is €1.8 billion but €600 million of this is pre-committed spending in order to address factors including demographics). This figure was set out in the documentation that accompanied Budget 2017 last October.  In answer to previous PQs, I have set out that the carryover cost of measures introduced in Budget 2017 amounts to c.€700 million, leaving c.€500 million available for allocation in Budget 2018 for tax and expenditure measures. The amount available for expenditure, based on an allocation of a 2:1 split between expenditure and taxes, as set out in the Programme for Government is to provide for both current and capital expenditure measures. The €200 million the Deputy refers to relates to an estimate of the amount available for current expenditure.

The estimated net fiscal space for the period 2019 to 2021 in Budget 2017 was c.€8.1 billion. 

These estimates are consistent with compliance of Ireland's obligations under the fiscal rules, namely the expenditure benchmark pillar of the preventive arm of the Stability and Growth Pact. According to this metric, fiscal space is calculated as the potential growth rate of the economy (10-year average) less an appropriate margin which takes into account the fact that we have not yet achieved our medium term budgetary objective of a structural deficit of 0.5 per cent of GDP.

Fiscal space projections are based on a number of moving parts (GDP deflator, reference rates for potential growth, etc.) set each year by the European Commission.  The Commission published these as part of its Spring Forecast and my officials are incorporating these into the updated calculations for fiscal space.

Furthermore the value for general government expenditure, including gross fixed capital formation, produced by the Central Statistics Office is an integral part of the calculation and can change when the National Income and Expenditure release is published in the summer.  Given all these moving parts, I want to stress that the figures, as always, are work-in-progress estimates and will evolve over time.

The next estimate of the fiscal space for 2018 will be set out in the Summer Economic Statement 2017 published later this month.