Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

87. To ask the Minister for Finance the margin of compliance with the expenditure benchmark and the structural balance under EU fiscal rules under the scenario outlined in table 6 of the summer economic statement in each of the years 2020 to 2024; and if he will make a statement on the matter. [35276/19]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The margin of compliance with the expenditure benchmark can be found in row n of Table A1 in Annex 1 of the Summer Economic Statement (SES). This assessment is consistent with the estimates published as part of the Stability Programme Update (SPU) 2019 and further takes into account the orderly Brexit scenario ('Scenario A').

As the Deputy will appreciate, the SES consists of high-level, indicative scenarios and does not include a full set of detailed macro-economic and fiscal forecasts as published bi-annually in the SPU and Budget. Accordingly the full set of inputs, to provide an updated assessment of the fiscal rules, are not currently available.

The next set of official forecasts will be published as part of Budget 2020 in October.

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

88. To ask the Minister for Finance the indicative nominal budgetary package in table 6 of the summer economic statement under an orderly Brexit scenario in each of the years 2020 to 2024 if the general Government balance were to be 0% in each of the years in tabular form; the margin of compliance with the expenditure benchmark and the structural balance under the EU fiscal rules; and if he will make a statement on the matter. [35277/19]

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

90. To ask the Minister for Finance if the nominal GGB figure were added to the indicative nominal budgetary package in table 6 of the summer economic statement then the GGB would be zero for each of the years; if so, the reason this would give a greater budget package in each of the years than the gross fiscal space outlined in table 7 in which deficits in the GGB are forecasted for 2021 to 2024, inclusive; and if he will make a statement on the matter. [35279/19]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 88 and 90 together.

Simplistically, adding the nominal general government balance (GGB) presented in Table 6 of the Summer Economic Statement 2019 (SES) to the indicative nominal budgetary package would result in the nominal budgetary package increasing by the same amount and the GGB accordingly falling to zero each year, all else being equal.

Assessment of the expenditure benchmark and structural balance is based on European Commission forecasts and, as a result, a direct one-to-one comparison following the above hypothetical reallocation is not possible. This assessment furthermore relies upon numerous variables, including the composition of the new budgetary package and macroeconomic factors.

The difference between the GGB and fiscal space is conceptual in nature. The GGB represents the projected difference between general government revenue and general government expenditure. Fiscal space, which is derived from the expenditure benchmark, represents the legally permitted increase in expenditure and is effectively decoupled from revenue performance.

As the Deputy is aware, this Government is committed to framing the budgetary parameters based on what is appropriate for Ireland and not simply a full and literal application of legally permitted limits. My Department, as well as other commentators such as the Irish Fiscal Advisory Council, have repeatedly highlighted the unsuitability of the harmonised fiscal rules. The Summer Economic Statement included the fiscal space table purely for transparency and completeness. 

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

89. To ask the Minister for Finance the structural balance under EU fiscal rules according to table 7 of the summer economic statement notwithstanding the concerns over using fiscal space; and if he will make a statement on the matter. [35278/19]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Forecasts of the main economic and fiscal variables (including the structural balance) were published in the Stability Programme Update (SPU) 2019 in April. These forecasts are consistent with the baseline budgetary package (i.e. €2.8 billion).

Revised forecasts will be published by my Department in October alongside the Budget. The Summer Economic Statement (SES) 2019 sets out two potential scenarios that will impact on Budget 2020, namely an orderly Brexit or a disorderly Brexit. A further full set of macroeconomic and fiscal forecasts were not produced by my Department in line with its policy of only doing so twice a year, i.e. SPU and Budget.

Table 7 of the SES is a simple illustration of the amount of fiscal space consistent with scenario A. While it attempts to demonstrate the impact on the general government balance of the full utilisation of available fiscal space, this is done in a static manner for illustrative purposes. It is clearly stated that it is not the intention of this Government to use any of this additional fiscal space, rather, the budgetary package outlined in table 6 will be adhered to, should Britain exit the EU under the orderly assumptions. Therefore, any calculations based on the use of this fiscal space are purely hypothetical.

The following table provides an estimate of the structural balance consistent with Table 7 of the SES based on a ceteris paribus assumption that the output gap remains unchanged when the full available fiscal space is used.

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

91. To ask the Minister for Finance the forecasted Exchequer borrowing requirement under the scenario outlined in table 6 of the summer economic statement; and if he will make a statement on the matter. [35280/19]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Exchequer Borrowing Requirement (EBR) is a bottom-up forecast based on updated macroeconomic forecasts endorsed by the Irish Fiscal Advisory Council (IFAC). The forecast is conducted twice annually; in Spring, in advance of the Stability Programme Update, and again in Autumn, in advance of the Budget. Therefore there is no EBR forecast corresponding to Summer Economic Statement 2019. Instead, the Summer Economic Statement provides a top-down estimation of the resources expected to be available for the forthcoming Budget.

The next formal EBR forecast will be set out in the White Paper on Receipts and Expenditures which will be published in advance of the Budget and will set out the no-policy-change position for 2020.