Tax, not growth, to determine budget cuts

Finance Minister Michael Noonan will determine the size of October’s budget cuts based on tax revenues and not growth forecasts, he said.

The minister was responding to the Central Bank, which downgraded growth forecasts for this year and next year and advised the Government to stick to the planned €3.1bn in budget cuts in October.

“The next budget is going to be tough and we’ll have to stick to the targets. There’s a little bit of flexibility emerging now, but if we do what the (Central) Bank did and look at the targets over the two years we’ll still have to adjust by about €5bn over 2014 and 2015,” the minister said at an event at the University of Limerick. “It’s too soon to predict the budget, because the budget is coming forward to October, I don’t have enough data yet, to see where we’ll land.