DUBLIN Oct 15 Ireland's government forecast a
2014 fiscal deficit of 4.8 percent of GDP on Tuesday as
ministers presented next year's budget, the country's first
without an international aid backstop since it took a bailout in
Following are comments to parliament by Finance Minister
OVERALL AIMS OF BUDGET
"The purpose of this budget is to continue the progress we
have made; to reinforce policies that grow the economy; to
establish the conditions which will create jobs; and to prepare
for exiting the bailout programme."
EXITING THE BAILOUT
"One of the primary tasks of this budget is to lay down the
conditions for a successful exit from the bailout programme at
the end of this year ... We are well on course to do this..."
"By the time the majority of the measures that I have
announced today become law on the first of January next, I am
confident that Ireland will have left the EU/IMF programme.
"The recovery is well underway but there are still risks."
"We will bring in a deficit of 4.8 percent in 2014, we will
bring in a small primary surplus, demonstrating that our
national debt, which has been rising for so many years, is under
"We will achieve these targets by an adjustment of 3.1
billion euros, 2.5 billion euros of which will consist of
expenditure cuts and tax increases."
FISCAL, ECONOMIC FORECASTS
"The forecast deficit for 2013 is 7.3 percent (of GDP), for
2014, 4.8 percent and for 2015, 2.9 percent. We have beaten our
deficit target during each year of our programme, and a deficit
at 4.8 percent will beat the target again next year."
"The debt ratio will move onto a downward path from next
year onwards - to 120 percent at end-2014, 118.4 percent at
end-2015 and 114.6 percent at the end of 2016. This downward
momentum will further enhance market confidence in Ireland."
"My department is forecasting GDP growth of 0.2 percent this
year, strengthening to 2 percent next year."
"The Government has decided that the banking sector should
make an annual contribution of 150 million euros to the
exchequer for the period from 2014 to 2016...
"In addition, and to level the tax position of all banks, I
am removing the restriction on the use of deferred tax assets
for NAMA (bad bank) losses."
"In light of increases in property prices due to the supply
limitations in some areas, it is important that we increase the
supply of suitable residential housing stock to prevent a new
property bubble emerging."
INDIVIDUAL TAX RATES
"The rate of VAT for the tourism and hospitality sector and
the other sectors to which it applies is due to revert to 13.5
percent... However, it is important that we reinforce success
when possible, so I have decided to continue the 9 percent rate
of VAT for these vital sectors."
"I have also decided to reduce the air travel tax to zero
with effect from the 1st of April 2014."
"We are 100 percent committed to the 12.5 percent
corporation tax rate. This will not change."
"Within the next twelve months I expect that the vast
majority of customers who are currently in (mortgage) arrears
will have been offered and accepted a sustainable solution."
PRECAUTIONARY CREDIT LINE
"Ireland is fortunate that the NTMA (debt agency) has almost
25 billion euros in cash balances; in effect we have a credible
backstop already in place.
"When the budget is concluded I plan to have consultations
on our exit strategy with the IMF, the European Commission and
the European Central Bank. Having heard their views, I will
advise the government on the best course of action."
Following are comments to parliament by Public Expenditure
Minister Brendan Howlin:
"The expenditure measures I am announcing for 2014 amount to
1.6 billion euros out of an overall consolidation of some 2.5