Paschal Donohoe (Dublin Central, Fine Gael)
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My Department produces a comprehensive set of macroeconomic and fiscal forecasts twice a year, in the spring Stability Programme Update and the autumn Budget. These projections take into account the budgetary measures in place in each year.

The costing of specific expenditure measures is a matter for my colleague, the Minister for Public Expenditure and Reform. While my Department does not estimate the second-round effects of budgetary measures in the form of increased taxation receipts on a measure-by-measure basis, additional revenues returned to the Exchequer are approximated via a top-down process.

Specifically, the aggregate Budget package, including inter alia changes in social welfare payments and other expenditures, are incorporated into the macroeconomic forecasts produced by my Department. These macroeconomic projections drive the forecasts of taxation revenue.

For example, if the total Budget package were to result in an increase in consumption for next year in the macroeconomic projections this would, all else equal, drive an increase in VAT receipts in the fiscal projections.