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Monday 19 March 2018

Call to press on with savings plans

The Irish Fiscal Advisory Council has called on Michael Noonan to press ahead with planned spending cuts
The Irish Fiscal Advisory Council has called on Michael Noonan to press ahead with planned spending cuts

Government advisers have urged Finance Minister Michael Noonan to press on with planned spending cuts and tax changes in future budgets.

Amid suggestions that savings from the deal on Anglo-Irish promissory notes should ease austerity, the Irish Fiscal Advisory Council called for the coalition to maintain its programme.

The council dropped its call from last September for the Government to force through an additional 1.9 billion euro in savings up to 2015.

It said that a "suggested margin of safety" has been broadly achieved with the deal on the repayment costs of the Anglo-Irish promissory notes, better than expected Exchequer figures and improving overall economic growth.

But it said that the Government should press ahead with savings plans of 3.1 billion euro in 2014 and 2.0 billion euro in 2015.

The Irish Fiscal Advisory Council was established in July 2011 as part of a wider agenda of reform of Ireland's budgetary architecture. Its chair is Professor John McHale.

Its role is to assess and comment on whether the Government is meeting its own stated budgetary targets and objectives.

Professor McHale warned that significant uncertainties remain, particularly around growth prospects and cutting the runaway spending in health. He also noted that the second Croke Park deal, if successfully implemented, would be a key part of budget control.

"While there are tentative signs of a stabilisation in domestic demand, the weakening of growth in major trading partners is curbing growth in net exports," the review found.

"Expenditure pressures in (the departments of) Health and Social Protection in 2012, in part driven by service demand, have also raised concerns about the implementation of planned adjustment measures. However, improved monitoring in health and a successful implementation of the Croke Park Extension Agreement should help underpin expenditure savings."

Press Association

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