independent

Wednesday 16 April 2014

Noonan hopes to slash €2bn tax target for 2015

17/12/2013 (L to r) Fianna Fail Spokesperson on Jobs, Enterprise and Innovation Dara Calleary TD & Fianna Fail Spokesperson on Finance Michael McGrath TD during a press breifing in response to the publication of the GovernmentÄôs Medium Term Economic Strategy on the plinth of Leinster House, Dublin. Photo: Gareth Chaney Collins
Fianna Fail Spokesperson on Jobs, Enterprise and Innovation Dara Calleary TD & Fianna Fail Spokesperson on Finance Michael McGrath TD. Photo: Collins

THE Government may not have to impose the full €2bn in tax hikes and spending cuts in Budget 2015, Finance Minister Michael Noonan has hinted.

Mr Noonan said that while the target was €2bn, the tax figures were "quite strong", suggesting the Government may have some wriggle room.

"The target is, as I said, €2bn, but there's material around that suggests the target will be less than that when we come to the end of 2014," he said.

The Government must cut the budget deficit to below 3pc of the value of the economy by 2015. But it is projecting to beat its targets both this year and next year.

It comes as the Economic and Social Research Institute (ESRI) gave an upbeat assessment of the economy and said there was a possibility of a "mild" Budget for 2015 if the growth projections pan out as expected. But it warned that there were still uncertainties.

The State's budgetary watchdog, the Fiscal Advisory Council, has said there was a heightened risk that the Government may not reach its deficit target in 2015 because of the softer budget for this year.

It has urged the Government to stick with the €2bn planned adjustment for 2015 and warned more may be needed if growth doesn't materialise as strongly as estimated.

Global ratings agency Fitch has said it anticipates further fiscal consolidation next year and 2015.

"Delivering this planned consolidation would help ensure public debt sustainability, supporting Ireland's 'BBB+'/Stable rating," the agency said.

"Ireland has exited its bailout programme facing high debt and slow growth, implying that declining debt requires a prolonged period of large primary surpluses.

"We forecast gross general government debt to GDP to peak at 122pc in 2014," the agency added.

Irish Independent

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