Readers like you keep news free for everyone.
More than 5,000 readers have already pitched in to keep free access to The Journal.
For the price of one cup of coffee each week you can help keep paywalls away.
Readers like you keep news free for everyone.
More than 5,000 readers have already pitched in to keep free access to The Journal.
For the price of one cup of coffee each week you can help keep paywalls away.
THOUGH MANY may be happy with the Government’s deal on the promissory notes simply because it allows the final death of IBRC – the former Anglo Irish Bank, an institution few will mourn – most people will simply wonder how the deal impacts on future budgets.
Well, the news is that the deal won’t make much of an impact on this year’s Budget – that is, the taxes and spending in place for 2013 – but it will ease the burden quite a bit in the Budget coming this December, for 2014.
The graphic you’ll see below (which you can see in full here, if you need a larger version) is from the Department of Finance’s technical briefing this evening, and shows the effect for this year’s Budget and for the next two.
The ‘GGB’ figure are the very top line is the deficit the government currently expects to run (that is, without introducing any new policies and simply leaving the law as it is for another year). These figures were most recently updated in the documents accompanying Budget 2013.
Underneath that is a list of the impact caused by each measure.
In order, here’s what each line means:
The end result is what you see at the bottom – the effect for 2013 is negligible, but for 2014 and 2015 the Budget changes can now be €1 billion softer.
Unti today, Budget 2014 was required to find adjustments of €3.1 billion – with €2.0 billion in spending cuts and €1.1 billion in tax increases. This adjustment could now be significantly watered down without hampering Ireland’s ability to meet its deficit targets.
Similarly, the adjustments for Budget 2015 were to include €1.3 billion in spending cuts and another €700 million in taxes. This adjustment could be almost halved and the targets could still be met.
To embed this post, copy the code below on your site