Speaking before travelling to the Fine Gael parliamentary party think-in in Laois, Mr Noonan warned that while Budget 2014 was going to be “very tough”, he believed the adjustment could be as low as €2.5bn.
“You see the debate in the newspapers that Labour want to go lighter. But, I mean, €2.5bn is still a very tough budget. So somewhere between €2.5bn and €3bn is the adjustment and that’s a very tough budget,” he said.
Mr Noonan said Ireland was close to exiting the bailout.
“All I can say to the people is that we are coming towards the end and we’d want to keep with it now. We’re like a hurling team: we’re five points ahead going into the last quarter and we need to close out the game. Now is no time for slacking.”
His remarks on the size of the budgetary adjustment will provide some welcome relief for the Labour Party, whose leader, Eamon Gilmore, and other Cabinet colleagues have argued that there was no requirement for Ireland to exceed the troika target of 5.1% of GDP because of a €1bn saving on the promissory notes from the former Anglo Irish Bank.
Pressure is growing within Labour to deliver something to the electorate in the Oct 15 budget as the latest Red C opinion poll has the party at just 10%, down from its 17% high of the general election in early 2011.
Arriving at the party meeting in Killenard, Co Meath, where a number of Fine Gael ministers have said they would like to see a lower figure implemented, Mr Noonan said exiting the bailout was now the Government’s priority.
“What we need to do between now and Christmas is to exit the bailout programme and do that in a convincing way, stay out and get more money at reasonably low interest rates.”
He said Ireland needed to run a primary surplus, collecting more in tax revenue than spending without taking interest payments into account. Mr Noonan said he was still waiting on tax returns for September and on the CSO projected growth figures for either 2013 or 2014.
Mr Noonan rejected claims he was “moving the goalposts” by placing an emphasis on the primary surplus instead of the target of 5.1% of GDP.
“We need to run a primary surplus to ensure that we’re back in international markets to get low interest rates and whatever figure it takes to get back to that is the adjustment figure. I’m not a martinet [a strict disciplinarian] on these issues, I’m not ideological. I was just good at arithmetic when I was at primary school.”
Vital economic growth figures due this Thursday will have a significant impact on how the budget is formulated. It is hoped they will show the economy has returned to recovery after dipping back into recession in the first quarter of 2013.
Mr Noonan said he felt, anecdotally, that the economy was growing, citing the creation of 650 net jobs every week in the past 12 months.
“The tax figures coming in and employment figures would suggest the economy is growing,” he said.
Mr Noonan praised the Labour Party for the part it has played in what he called “a national government”. “Labour should get an enormous amount of credit for fixing the banjaxed economy,” he said.