Gerald Nash (Louth, Labour)
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91. To ask the Minister for Finance his views on a recent IFAC report (details supplied) which states that the Government has failed to deliver on its commitment to publish a credible medium-term strategy in terms of the SPU 2021; his further views on the view that the recent SPU is based on poorly founded medium-term spending forecasts and does not incorporate major policy commitments referenced in the Programme for Government; and if he will make a statement on the matter. [31608/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I note the Fiscal Council’s view on the fiscal forecasts and always welcome the Council’s contribution.

As I have stated previously, the Government took the decision to draft the Stability Programme Update (SPU) on a ‘no policy change’ basis in view of the considerable uncertainty around both the trajectory of the pandemic and the pace at which restrictions could be lifted. There was simply too much epidemiological, economic and fiscal uncertainty in March to make policy decisions with significant budgetary implications. Accordingly, the medium-term forecasts in the SPU were undertaken on a purely technical basis and do not incorporate any new policies.

I note that the Council endorsed the SPU medium-term macroeconomic forecasts, and indeed view some potential upside to my Department’s projections. More broadly, I welcome the Council’s endorsement of the Government’s fiscal stance. The Council agrees that the unprecedented level of budgetary support that Government has provided has been the appropriate response to the pandemic. The Council is of the view that, as the situation evolves, supports should be more precisely targeted and reduced in a gradual and responsible manner. This is precisely what the Government announced in the Economic Recovery Plan.

Finally, I am in complete agreement with the Council that a credible medium term fiscal anchor is essential. Now that more certainty exists, the Government will set this out in the forthcoming Summer Economic Statement.