`Fiscal space' for next five years expected to be €11.3bn

The Government expects to have roughly €1 billion for spending increases and tax cuts in October’s budget.

In the summer economic statement, Minister for Finance Michael Noonan said the State's budgetary position was on a safe and sustainable path.

He said a particular focus of tax reduction in the next budget would be the continued phasing out of Universal Social Charge with an emphasis on low and middle income earners.

"This will help us to incentivise work while maintaining a broad tax base," he said.

Based on current macroeconomic projections, Mr Noonan said the available "fiscal space" for the next five years would be €11.3 billion.

This is the amount that remains after providing for pre-committed policies such as demographics, the Lansdowne Road agreement and capital plans, he said.

The scope for new measures in the budget is well below the €1.5 billion announced in the 2016 package, which was also augmented by a series of supplementary estimates.