When Finance Minister, Michael Noonan announced Budget 2015 he said it was all about securing a new recovery for Ireland.
The macro-economic and fiscal framework underpinning this year’s Budget is far more favourable than in previous years, according to minister for finance, Michael Noonan. He pointed out in his budget speech that while exports are continuing to grow, the recovery is broadening with domestic sources of growth, consumer spending and investment, contributing positively for the first time since 2007. “We have now had seven consecutive quarters of solid annual employment expansion and we have now see an increase in employment of over 70,000 people at work since the low-point in early-2012,” he said.
The finance minister also pointed out that in 2014 taxes grew steadily and his department is projecting an outturn of over €41bn – €1bn ahead of profile. “Thanks to this strong revenue growth, effective expenditure management and the impact of European statistical changes, the forecast deficit for 2014 is 3.7% of GDP. This is well inside our Excessive Deficit Procedure target of 5.1% and the 4.8% target on which we built the Budget for 2014,” he said.
The Department of Finance is forecasting GDP growth of 4.7% this year and GDP growth in 2015 of 3.6%. “These forecasts are prudent and were endorsed by the Irish Fiscal Advisory Council,” Noonan said. “However, as a result of the package of measures I am introducing today, the GDP growth forecast in 2015 has been revised up to 3.9%. In 2016, the growth rate will be 3.4%. In 2017, the growth rate will be 3.4%. In 2018, the growth rate will be 3.4%. This is the type of solid and steady economic growth that we want in the coming years.”
The Government’s strategy to reduce the burden of debt by improving the terms of our EU/IMF loans and the promissory note, minimising future borrowing requirements by reducing the deficit and by growing the economy is working according to the minister.
“The forecast debt to GDP ratio for end 2014 is under 111%. When account is taken of cash balances and other financial assets, the 2014 net debt forecast is just below 91%. Furthermore, a debt reducing primary surplus of 0.3% of GDP will be achieved this year. However, our debt is still high by comparison to many of our fellow EU members so we need to continue this approach. Not only will this make the debt more sustainable, it will also minimise the cost to the taxpayer of interest paid on the national debt.”
In conclusion to his announcement of Budget 2015, Minister Noonan said the total government revenue will be €65.2bn in 2015 and total general government expenditure will be €70.5bn. “Expenditure under the Government expenditure ceiling, consisting of gross voted expenditure along with expenditure funded by the Social Insurance Fund and the National Training Fund, will be €53.6bn.