Written answers
Wednesday, 11 July 2018
Department of Finance
National Development Plan
Jonathan O'Brien (Cork North Central, Sinn Fein)
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163. To ask the Minister for Finance if a proposal (details supplied) will be costed. [31134/18]
Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy is aware, under the expenditure benchmark capital increases are smoothed over a four-year period. As such, in order to assess the impact of capital smoothing on the proposal submitted by the Deputy, actual capital expenditure in 2016 and 2017 and the planned expenditure for 2018 must be included in the calculations, as these impact on 2019, 2020 and 2021.
The following table compares the National Development Plan with the Deputy's proposal. The impact on fiscal space in comparison to table 3 of the 2018 Summer Economic Statement is shown in row d.
As the Deputy is aware, forecasts beyond 2021 have not been compiled by my Department.
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| a. National Development plan, € millions | 7,300 | 7,900 | 8,600 | 8,900 | 9,400 |
| b. Alternative Plan, € millions | 8,500 | 9,100 | 9,700 | 10,300 | 10,900 |
| c. (=b-a) Additional expenditure, € millions | 1,200 | 1,200 | 1,100 | 1,400 | 1,500 |
| d. Impact of c on fiscal space after smoothing, € millions | 300 | 600 | 875 | n/a | n/a |
| e. Alternative Plan, per cent of GNI* | 3.8 | 3.9 | 4.0 | n/a | n/a |
| f. Alternative Plan, per cent of GDP | 2.6 | 2.6 | 2.7 | n/a | n/a |
As I have previously stated, such increases represent money that we would have to borrow. In this regard it is the full amount in row c which would have to be raised rather than the smoothed amount in row d, i.e. €6.4 billion by 2023.
Given our elevated debt levels, borrowing even more and increasing the debt would be reckless, particularly in view of the major downside risks to the economy. The Government is committed to prudent budgetary policy that supports sustainable and steady improvements in our living standards.
Finally, the Parliamentary Budget Office (PBO) provides independent and impartial information, analysis and advice to the Houses of the Oireachtas. The Deputy can avail of the PBO as a source of financial and budgetary intelligence and advice.
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