| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy

RSS FEED


How to use our RSS feed

Follow Finfacts on Twitter

 
Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.

Welcome

Finfacts is Ireland's leading business information site and you are in its business news section.

Links

Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News

Newspapers

Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News

 

Feedback

 

Content Management by interactivetools.com.

News : Irish Economy Last Updated: Sep 23, 2014 - 12:02 PM


Irish Budget 2015: Fiscal advisory council says keep the champagne on ice
By Michael Hennigan, Finfacts founder and editor
Sep 22, 2014 - 8:13 AM

Email this article
 Printer friendly page

Irish Budget 2015: The fiscal advisory council today published a Pre-Budget Statement and recommended that despite strong second quarter economic data, the Government should keep the champagne on ice and go ahead with a final dose of tax rises and spending cuts valued at €2bn as per the original deficit reduction plan.

Michael Noonan, finance minister, will welcome the antidote to high expectations that the age of austerity has ended and he will ignore the council's advice.

He will be able to target a deficit of less than the EU's official limit of 3% of GDP (gross domestic product) with much les than €2bn of changes and besides the economy, he has to also attend to politics.

“There is a risk that public fatigue with prolonged fiscal retrenchment could make it difficult to achieve the primary surpluses needed to reduce the debt-to-GDP ratio significantly,” says the statement .

The council said that in the past, "Ireland’s fiscal policy has shown an unfortunate tendency to contribute to boom and bust economic cycles that have harmed the economy and have had very negative social consequences. We are now entering a crucial period for breaking this pattern. Fiscal policy must remain focussed on the goal of repairing the public finances even in the face of short-term improvements in key indicators. This is required in order to underpin a return to sustainable medium-term economic growth."

Other points made in the statement:

  • "Government expenditure is likely to exceed revenue by around €7bn in 2014. The overall level of debt is now five times higher than at the outset of the crisis and is 1.2 times the size of the economy. This highlights the continued vulnerability of the overall fiscal position.
  • Going into Budget 2015, the latest data suggest that macroeconomic and fiscal developments in 2014 have been significantly better than expected. This means that uncertainty regarding the likelihood that Ireland will meet its short-run Excessive Deficit Procedure (EDP) targets for 2014 and 2015 has been substantially reduced. This is a welcome achievement and means that a full Budget adjustment of €2bn would most likely comfortably secure compliance with the 3 per cent ceiling in 2015.
  • Compliance with the official targets does not mean that the overriding task of repairing the public finances has been accomplished. The 3 per cent ceiling should be regarded as the maximum tolerable deficit level, not a prudent level.
  • The fiscal council remains of the view that the most appropriate course of action is to implement the final instalment of the fiscal consolidation plan, and then to follow the less demanding requirements of the Budgetary Rule in later years. A premature easing in fiscal adjustment now would increase the risk of additional consolidation being necessary in future.
  • In the medium-term, the Government will face considerable challenges in maintaining tight expenditure control under current plans due to demographic and other demand and cost pressures. This argues against any premature erosion of the government’s revenue raising capacity in the forthcoming Budget.
  • In order to reduce the debt-to-GDP ratio, Ireland will likely need to run a primary surplus well above the level expected to be reached in 2015. Maintaining the fiscal discipline required to achieve large primary budget surpluses will become politically harder following a long period of fiscal consolidation and as crisis memories fade.
  • Budget 2015 will be the first since Ireland exited the EU/IMF Programme. By adopting a prudent budgetary stance, the Government can send a strong signal reinforcing its stated resolve to rectify the remaining weaknesses in the public finances."

Pre-Budget 2015 Statement (link should be live at some point Monday morning)

Irish Economy 2014: GDP up 1.5% in Q2; GNP up 0.6% - personal spending weak

Surging Irish growth a lesson for European Union policy makers?

Irish Budget 2015 Page


© Copyright 2011 by Finfacts.com

Top of Page

Irish Economy
Latest Headlines
Finfacts launches new news site
Irish Farmers & Milk Prices: 'Shackles' off in April; Demanding safety-net in August
Irish pension managed funds returns at over 12% year-to-date in 2015
Irish chartered accountants' salary packages surge 13% in 12 months
Irish services PMI fastest rate since late 2006; Official data up only 2.4% in 12 months
Irish Economy: Tax €893m above target in year to July — €653m from corporation tax
Fact and Fiction: Time to review Ireland's economic statistics?
Irish M&A deals H1 2015: Dutch or UK firm acquires Irish firm for €32.6bn - they are both American
Irish manufacturing PMI strong in July
Irish Economy: Fall in GNP in Q1 2015; GDP rises
Irish Economy 2015: Central Bank lauds strong recovery; Time to start paying down debt
Irish Budget 2016: Ibec demands 20 tax cuts, spending and investment rises
Low pay in Ireland; Lowest social security & corporate taxes in Europe
Ireland vs Greece: Enda Kenny's false claims on growth, taxes and debt
Irish standard of living in 2014 below Euro Area average, Italian level; Prices 5th highest in EU28
Irish goods exports rose a record 30% in April - due to fake tax-related transactions
Mexican tall ship to sail into Dublin on June 17th
Irish industrial production up 20% in first four months of 2015; Construction down 2.6% in first quarter
Irish Economy 2015: ESRI slams return to boom-time pro-cyclical fiscal policy
Irish pension fund returns in average range 1.6% - 1.8% in May 2015
Irish service sector PMI remains strong; Tax avoidance clouds data
Ireland: Official unemployment rate at 9.8% in May; Broad rate at 19% — 440,000 people
Ireland: Fiscal Council warns of dodgy forecasts, no plan; OECD warns of new property bubble
Irish Public Finances: Tax revenue in first five months of 2015 €734m ahead of target
No simple measure of economic progress in Ireland: GDP & GNP defective
Irish manufacturing PMI rises in May; Production up unbelievable 45% in year to March!
ESRI says data volatility hinders Irish economic forecasting; Tax avoidance taboo cause
Ireland at 16 in international competitiveness ranking; US, Singapore and Hong Kong on top
Irish Economy 2015: Sectors to add 200,000 jobs?; Broad jobless rate at 19%
Irish Export Performance: Myths and reality - Ireland is a poor exporter
Irish Economy: 41,300 jobs added in 12 months to Q1 2015 - Construction up 19,600
China-Ireland: Economic relationship on a slow burn
Estonia, Austria, France, Ireland head global alcohol rankings
Irish Exchequer Returns: Tax receipts under target in April but ahead in year
Irish service sector PMI rose in April
Irish manufacturing PMI remained strong in April- includes overseas manufacturing
Irish Live Register + 90,000 activation scheme numbers at 439,000 in April
Ireland: Coalition drops 2018 full-employment target
Ireland Spring Statement: Noonan promises 200,000 net new jobs by 2018
Irish Economy 2015: Retail sales volume up 1.4% in month of March