THE GOVERNMENT is to publish a four-year “fiscal consolidation plan” as part of the pre-budget outlook in October, the Department of Finance has said.
Publication of the outlook is a regular annual event in advance of the December budget. It sets out the overall economic and financial position but does not normally include a four-year plan.
The spokesman said “updated macroeconomic projections” would be provided in the outlook document which is being prepared by Minister for Finance Michael Noonan with a substantial input from Minister for Public Expenditure and Reform Brendan Howlin.
The document will be prepared after the conclusion of the Comprehensive Review of Expenditure which is being carried out by Mr Howlin, who is expected to have it completed by late September or early October.
The four-year “medium-term fiscal consolidation plan” will cover the period 2012 to 2015, “in terms of the overall composition of revenue and expenditure and how we will reach our target, 3 per cent of GDP deficit by 2015”.
However, Government sources were reluctant to speculate as to the level of detail that would be contained in the plan.
They conceded that the EU-IMF-ECB troika “wouldn’t be averse to it”.
The incoming Government signed up to the Memorandum of Understanding agreed by its predecessor but this allows for a review of the details and targets in the light of the expenditure review.
The Fianna Fáil-Green Party administration set out a four-year plan to bring the deficit down to 3 per cent of gross domestic product by 2014. The Government has pushed that date out to 2015.
The Government accepted its predecessor’s targets in terms of expenditure reductions and taxation for this year and next. The four-year plan is expected to give at least an outline of the cuts and tax increases to be implemented by 2015.
Fianna Fáil spokesman on finance Michael McGrath TD said last night: “If the Government is preparing a fiscal plan to 2015, it needs to contain more than just headline figures for it to have any credibility domestically and internationally.
“For example, the expenditure cuts to 2015 would need to be broken down by individual departments.
“Equally, any anticipated increases in taxation would need to be broken down under the difference codes, such as Income Tax, Value-Added Tax, etc.
“The reality is that it is fine to have an overall fiscal plan but the real difficulty for the Government will be to pass a budget in December with the required level of adjustment and to bring society on board to the greatest extent possible.”
Meanwhile, Mr Noonan has secured the secondment of two highly-experienced officials from the Department of Foreign Affairs, Mr Nicholas O’Brien and Mr Gerald Angley, to improve the level of co-ordination between the Department of Finance and the Republic’s embassies.
Official sources said the move came at the initiative of the Minister, with the support of Tánaiste and Minister for Foreign Affairs Eamon Gilmore.
Sources said it arose from Mr Noonan’s “desire to make sure that the economic and financial work of the embassies was being orchestrated closely with his Department and that Finance was using the embassies to the full”.
Mr O’Brien previously worked as a Counsellor at the Embassy in Berlin but had served in the Department of Finance earlier in his career and Mr Angley was a First Secretary in the Paris Embassy where he worked on the economic, financial and investment side.
They are joining the budget and economic division of the Department of Finance.
