Stringent economic plan to replace troika programme

Anticipated exit from bailout this year will not lead to relaxing of austerity targets

Minister for Finance Michael Noonan will bring a proposal to Cabinet shortly to develop a stringent new economic plan to replace the troika bailout programme. Photograph: Julien Behal/PA Wire.

Minister for Finance Michael Noonan will bring a proposal to Cabinet shortly to develop a stringent new economic plan to replace the troika bailout programme. Photograph: Julien Behal/PA Wire.

Mon, May 27, 2013, 12:14

Minister for Finance Michael Noonan will bring a proposal to Cabinet shortly to develop a stringent new economic plan to replace the troika bailout programme.

The State’s anticipated exit from the bailout this year will not mean a relaxing of austerity targets as Mr Noonan hopes Government will approve a fresh regime with firm timelines similar to the EU-IMF-ECB programme.

He has already set aside €1.4 million from his 2013 estimates to draft the plan aimed at growing the economy and ensuring the rigour imposed by the external bodies since 2010 is not lost during the next seven years.

“When we leave the programme we won’t have that kind of discipline within our system any more and I want to make sure that, because of more loose arrangements, that we don’t lose impetus,” he said.

“So we want to bring an economic plan which will take us from 2014 to 2020 and be quite specific in the early years where different tasks will have to be done.”

Mr Noonan said the measure had not been requested by the troika but was an initiative of the Minister for Public Expenditure and Reform, Brendan Howlin, and himself, and “we’ll be going to Government with it shortly”.


Long-term plan
The plan runs well beyond the current Coalition Government’s term in office, as the next general election will take place in spring 2016 at the latest.

Fiscal targets will be built into this “wider economic plan”, with all Government departments and agencies set specific tasks, he has confirmed to members of the Dáil select sub-committee on finance.

The Minister said there were “some costs” involved in developing the plan “and we’re building them in this year because we’ve started the work on it already”.

He is confident Ireland will exit its programme “at the back end of this year”.

Separately, Mr Howlin has written to all Government departments outlining proposed percentage spending cuts for the years 2015 and 2016.

Departments have already been given targets for next year and the letter contained a reminder about the reductions expected in 2014.

Three-year expenditure “ceilings” will be set out in the budget, due to be announced in October of this year.

The Departments of Health and Social Protection are understood to have been told to identify spending reductions of some 3 per cent in both years, but the figure could rise to 5 per cent for other politically sensitive departments.


Self-employed tax returns
Meanwhile, self-employed people will have to file their tax returns earlier than usual next year.

Mr Noonan said he would this year be “guesstimating” the income tax returns of the self-employed, which are generally received in November, when the budget is announced in October.

“So I’ll probably have to bring the filing date forward, but I can’t do that until the second October budget because we’ll have to announce it in the next budget that there’s a bringing forward of the filing date.”

Mr Noonan said he would have to secure agreement with the Revenue Commissioners in order to bring forward the filing date without doing the same for the payment date.

Mr Noonan said it would be possible to “put some kind of adjustor in” when the December figures were received. “Maybe some tolerance on what we’ll do on excises or something like that for one year until we get the filing date forward,” he said.

In 2012, the deadline for those wishing to pay online was November 15th, or October 31st if they did so by post.

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