Government publishes Information Note on Economic and Budgetary Outlook

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INFORMATION NOTE ON THE ECONOMIC AND BUDGETARY OUTLOOK 2011-2014

(in advance of publication of Four-Year Budgetary Plan)

Since the onset of the current economic and financial crisis, the Government’s strategy for recovery has been based around three key principles:


1 Restoring competitiveness;

2 Repairing the banking system; and

3 Returning sustainability to the public finances.

Price and earnings data confirm that significant competitiveness adjustments have taken place since 2008. The Statements on Banking on 30th September brought clarity to the costs and methods of recapitalising our banks.

The 30th September statement also reaffirmed the Government’s commitment to achieving a General Government Deficit of 3% of GDP by the end of 2014. The statement also committed to the publication of a Four-Year Budgetary and Growth Plan which will set out a credible path for the achievement of the 3% target. The plan will be published later this month.

Having reflected on the views expressed by Deputies during last week’s Dáil debate, the Government has decided to publish this information Note.

Commenting on the release of the Information Note, the Minister for Finance said:

“Over the past two and a half years, the Government has consistently demonstrated its determination to restore stability to the public finances.

Since mid-2008, the Government has implemented measures worth close to €15 billion in order to stabilise the position. The Exchequer Returns in recent months and other data shows we are succeeding. This stabilisation must now be followed by a reduction of the deficit in line with the commitments given. I welcome the agreement of the main opposition parties to the 3% deficit target by 2014, which sends out a strong signal that Ireland is committed to putting its public finances in order.

The Government has decided that a consolidation package of €15 billion will be required over the course of the next four years if we are to deliver on our deficit reduction target.



A significant frontloading of the consolidation in 2011 is deemed necessary and will underline the strength of our resolve and show that the country is serious about tackling our public finance difficulties.

By the end of 2011, we will have implemented over two-thirds of the overall adjustment and we will be on a path towards renewed budgetary sustainability. Through consolidation we aim to stabilise our General Government debt to GDP ratio over the 2012 – 2013 period, before reducing it thereafter.

The Government has agreed on an adjustment of €6 billion for 2011 and this will reduce the General Government deficit to around 9¼ to 9½% of GDP next year. Taking account of the €15 billion consolidation package, my Department now expects annual average real GDP growth to be 2¾% over the 2011 to 2014 period.

I want to stress again the strength of the Government’s resolve to return the country to a sustainable fiscal position. I am well aware that such measures will impact on the living standards of everybody. But our spending and revenues must be more closely aligned. This is the only way to ensure the future economic wellbeing of our society.”

Further details on the nature of the adjustment for 2011 and the distribution and composition of the measures over the remaining years of the forecast period will be announced in the Four-Year Plan. In addition the Plan will outline a programme of structural reform, which will help to further restore competitiveness and support economic growth. The Plan will be published later this month.
[ame="http://www.scribd.com/doc/41030123/Information-note-on-the-Economic-and-Budgetary-Outlook-2011-2014"]Information note on the Economic and Budgetary Outlook 2011-2014[/ame]
 


grafter1

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Can someone please tell Mr Lenihan that a 6Bn adjustment will leave the debt to GDP at 11% and not somewhere around 9.5%.
 
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[ame="http://www.scribd.com/doc/41030239/Note-on-the-Accounting-Treatment-of-Promissory-Notes"]Note on the Accounting Treatment of Promissory Notes@@AMEPARAM@@document_id=41030239&access_key=key-37uwke8yv3io14lsxe9&@@AMEPARAM@@41030239@@AMEPARAM@@key-37uwke8yv3io14lsxe9[/ame]
 

Raketemensch

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2 Repairing the banking system; and
For gods sake, how many more times do we have to do this? Everytime we 'turn a corner' by the looks of things.
 

LiquidPaddy

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Where are all the figures that (I thought) were being released about growth estimates, etc.?
 

Congalltee

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For gods sake, how many more times do we have to do this? Everytime we 'turn a corner' by the looks of things.
€6,000,000,000 is probably not enough.
But from where will they cut?
Social Welfare - this money is quickley re-circulated into excise, local businesses.
Education - we are in the middle of a baby boom and in 4 years they will need classrooms. We have 140,000 students in college, with no prospects of jobs for them (has the number of places/lecturers for Law, Architecture, Civil Engineering being cut?)
Health - just get the strike over with. No reform will occur without patients dying. The blood is already on Harney's hands - reform should have happened in the good times.
Civil Service - are they still negotiating on giro half hours and privilege days- what type of signal does that spend?
Metro North - paying foreign engineers.
Car scrappage - more subsidies to exports.
Agricuture payments - they are matched by EU, so cutting is largely counter productive.
Defence forces - they may be needed yet.
Private pension subsidies - money used to buy bonds.
Tax breaks for property -money is gone, gone, gone.
McCarthy report - this government is too lazy to bother.
Commission on Taxation - who?
The small stuff - Presidency, Mercs, Political pensions, Judges, junkets and the other things people whinge at. To show the pain is being shared.
Whatever. It makes no difference now.

Unless, some of these cuts is balanced with using releasing some of the Pension Fund now as a stimulus, a severe double dip recession is on the way. Smart economy? - we should spend money on the Thick Economy. Now.

(For the avoidance of doubt this is a rant. In any event as the thread title starts with the word "Government" and a previous one uses the word "Savage" and "€6bn" no one pay much heed to this).
 
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Statement by Fine Gael Finance Spokesman Michael Noonan TD

Statement by Fine Gael Finance Spokesman Michael Noonan TD

“I met with the Minister for Finance this afternoon and was briefed by him
and his officials.

“Fine Gael believes that the deficit/GDP ratio proposed by the Minister of
9.5% of GDP for 2011 is a prudent target. The Government has given Fine
Gael no confidence, however, that they have any plan to protect jobs and
public services from the effects of the €6 billion correction they now
intend to deliver in the Budget.

“Fianna Fáil and the Greens don’t get it. The country needs hope, optimism
and the confidence that only a jobs and growth economic plan in parallel
with the fiscal correction would deliver.

“The country needs certainty and leaving the publication of the four year
fiscal plan until after polling day in Donegal will not do this.

“It is worrying also that the Government intends taking an interest holiday
on the promissory note arrangement they have used to fund the bank bailout.
By doing so they are certainly leaving a bigger problem to an incoming
Government, but they also risk undermining their own fiscal credibility.”
 

gijoe

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€6,000,000,000 is probably not enough.
But from where will they cut?
Social Welfare - this money is quickley re-circulated into excise, local businesses.
Education - we are in the middle of a baby boom and in 4 years they will need classrooms. We have 140,000 students in college, with no prospects of jobs for them (has the number of places/lecturers for Law, Architecture, Civil Engineering being cut?)
Health - just get the strike over with. No reform will occur without patients dying. The blood is already on Harney's hands - reform should have happened in the good times.
Civil Service - are they still negotiating on giro half hours and privilege days- what type of signal does that spend?
Metro North - paying foreign engineers.
Car scrappage - more subsidies to exports.
Agricuture payments - they are matched by EU, so cutting is largely counter productive.
Defence forces - they may be needed yet.
Private pension subsidies - money used to buy bonds.
Tax breaks for property -money is gone, gone, gone.
McCarthy report - this government is too lazy to bother.
Commission on Taxation - who?
The small stuff - Presidency, Mercs, Political pensions, Judges, junkets and the other things people whinge at. To show the pain is being shared.
Whatever. It makes no difference now.

Unless, some of these cuts is balanced with using releasing some of the Pension Fund now as a stimulus, a severe double dip recession is on the way. Smart economy? - we should spend money on the Thick Economy. Now.
Its broken down as: current spending €3.5billion; capital spending €1billion; increased taxes €1.5billion.

Basically all the cuts signaled in advance will take place. Including €9/week from pensions. I am guessing the dole will be cut from €196 to €180-183. Probably over €20/month off Child Benefit etc.
 

He3

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Could someone numerate look at the Promissory Note sheet and tell us what the PN cost comes to in plain English. Or Irish.
 

gijoe

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Could someone numerate look at the Promissory Note sheet and tell us what the PN cost comes to in plain English. Or Irish.
In cash terms €3.1billion in 2011; €3.3billion in 2012; €3.5billion or so in 2013 etc up to circa €4.5billion in 2020.
 

He3

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In cash terms €3.1billion in 2011; €3.3billion in 2012; €3.5billion or so in 2013 etc up to circa €4.5billion in 2020.
Thanks - are they cumulative cost?
 

consultant

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Drivetime and Mary Wilson interviewed both Joan Burton and Brian Cowen (I only caught part of Burton's contribution).

Effectively, both polticians got away with waffle and no substance. Burton's lack of passion or detail was disappointing.

Cowen, on the other hand, was worrying to say the least in his dismissive arrogance. No explanation. No rationale. Just Ireland needs a strong government who can make hard decisions. Ergo, we need him and his mob.

I was about to say that the performance of FF and their green props was tantamount to gross negligence. It isn't. It is in fact criminal negligence and must never be tolerated again.

If we cannot hold the present imcumbents to account, we absolutely must be able to do so in the future. As with directors of companies, ministers in government must be personally accountable for the results of their actions.
 

Ulysses

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Given that we've one of the lowest tax burdens in Christendom, I wonder how much of the budgetary adjustments will be in the form of tax hikes? :eek:
 

charley

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The growth figures given for 2011 were fantasy. It will be a minus figure with overall unemployment reaching 18% as course funding is cut and those currently on courses return to the live registar
 

gijoe

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Given that we've one of the lowest tax burdens in Christendom, I wonder how much of the budgetary adjustments will be in the form of tax hikes? :eek:
€1.5billion in 2011 anyway.
 

olamp

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Mar 24, 2010
Messages
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How can we believe a single word out of Lenihan`s mouth. He has been lying to us on a continuous basis .Remember budget day last year --"these are the last of the harsh measures-we have turned a corner ,I commend this budget to the house"? Liar liar liar.He has no idea what he is doing.
 


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