Tuesday, October 15 16:04:13
Minister Noonan has forecast a 2014 fiscal deficit of 4.8 percent of GDP today as he presented next year's budget, the country's first without an international aid backstop since it took a bailout in 2010.
Following are comments to parliament by Finance Minister Michael Noonan.
OVERALL AIMS OF BUDGET
"The purpose of this budget is to continue the progress we have made; to reinforce policies that grow the economy; to establish the conditions which will create jobs; and to prepare for exiting the bailout programme."
EXITING THE BAILOUT
"One of the primary tasks of this budget is to lay down the conditions for a successful exit from the bailout programme at the end of this year ... We are well on course to do this..."
"By the time the majority of the measures that I have announced today become law on the first of January next, I am confident that Ireland will have left the EU/IMF programme.
"The recovery is well underway but there are still risks."
"We will bring in a deficit of 4.8 percent in 2014, we will bring in a small primary surplus, demonstrating that our national debt, which has been rising for so many years, is under control.
"We will achieve these targets by an adjustment of 3.1 billion euros, 2.5 billion euros of which will consist of expenditure cuts and tax increases."
FISCAL, ECONOMIC FORECASTS
"The forecast deficit for 2013 is 7.3 percent (of GDP), for 2014, 4.8 percent and for 2015, 2.9 percent. We have beaten our deficit target during each year of our programme, and a deficit at 4.8 percent will beat the target again next year."
"The debt ratio will move onto a downward path from next year onwards - to 120 percent at end-2014, 118.4 percent at end-2015 and 114.6 percent at the end of 2016. This downward momentum will further enhance market confidence in Ireland."
"My department is forecasting GDP growth of 0.2 percent this year, strengthening to 2 percent next year."
"The Government has decided that the banking sector should make an annual contribution of 150 million euros to the exchequer for the period from 2014 to 2016...
"In addition, and to level the tax position of all banks, I am removing the restriction on the use of deferred tax assets for NAMA (bad bank) losses."
"In light of increases in property prices due to the supply limitations in some areas, it is important that we increase the supply of suitable residential housing stock to prevent a new property bubble emerging."
INDIVIDUAL TAX RATES
"The rate of VAT for the tourism and hospitality sector and the other sectors to which it applies is due to revert to 13.5 percent... However, it is important that we reinforce success when possible, so I have decided to continue the 9 percent rate of VAT for these vital sectors."
"I have also decided to reduce the air travel tax to zero with effect from the 1st of April 2014."
"We are 100 percent committed to the 12.5 percent corporation tax rate. This will not change."
"Within the next twelve months I expect that the vast majority of customers who are currently in (mortgage) arrears will have been offered and accepted a sustainable solution."
PRECAUTIONARY CREDIT LINE
"Ireland is fortunate that the NTMA (debt agency) has almost 25 billion euros in cash balances; in effect we have a credible backstop already in place.
"When the budget is concluded I plan to have consultations on our exit strategy with the IMF, the European Commission and the European Central Bank. Having heard their views, I will advise the government on the best course of action."
Following are comments to parliament by Public Expenditure Minister Brendan Howlin:
"The expenditure measures I am announcing for 2014 amount to 1.6 billion euros out of an overall consolidation of some 2.5 billion euros."