Public Policy Bulletin, 1 July 2019

Jul 01, 2019
Read about the Government’s Summer Economic Statement published last week and the Institute’s contributions to the National Economic Dialogue. 

Summer Economic Statement

Unlike other years, Minister Paschal Donohoe has to consider two budgetary scenarios when drafting this year’s Summer Economic Statement: One, to prepare for the real possibility of a no-deal Brexit, and the other, which plans for an orderly exit after the 31 October Brexit deadline.

Releasing the Summer Economic Statement last week, Minister Donohoe said that the “external environment” is becoming “increasingly challenging” and that a “disorderly Brexit” is now a “real possibility”, which is why the Irish Government needs to plan for such an event.

The Statement confirms to us that under an orderly Brexit scenario, the Government is targeting a surplus of 0.4 per cent of GDP for 2020.  This target will accommodate a budgetary package of €2.8 billion, of which €2.1 billion has been pre-committed to expenditure measures leaving €700 million for further allocation in Budget 2020.  However, a disorderly Brexit scenario could result in a deficit in the region of 0.5 to 1.5 per cent of GDP for next year.  In September, the Government will decide, based on information available at the time, which scenario will form the basis for Budget 2020.

The Summer Economic Statement sets out the key elements of the Government’s budgetary strategy and this year centres on the ongoing uncertainty surrounding Brexit. The Statement sets out that the objective of budgetary policy is the protection of domestic living standards irrespective of what format Brexit takes and aims to firstly avoid overheating the economy and, secondly, to build up appropriate buffers so that budgetary policy can support the economy in the event of a disorderly Brexit.

National Economic Dialogue

Representatives from Chartered Accountants Ireland attended the National Economic Dialogue which took place last week. We represented members on Brexit concerns and on items included in our pre Budget 2020 submission. The Dialogue facilitates an open and inclusive exchange on the competing economic and social priorities facing the government.

More details on the programme can be found on the Department of Finance’s website.

The Institute’s opening statement to the National Economic Dialogue is also available.

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