The Minister for Finance has said the Government would be in a position to introduce expansionary budgets from now until 2020, if it is deemed prudent to do so.

In the Government's Spring Economic Statement, Michael Noonan said the department was forecasting that employment would pass the two million people at work mark by next year.

He said the economy would replace all of the jobs lost during the downturn by 2018 and, in total, between 2015 and 2020, 200,000 jobs would be created.

Net outward migration was expected to cease next year with a return to inward migration from 2017 onwards.

Following GDP growth of nearly 5% last year, the Department of Finance is projecting GDP growth of 4% this year, with positive contributions from both exports and domestic demand.  

Mr Noonan said that the public finances are under control with the deficit falling below 3% this year, while debt levels are set to move down towards the European average in the next few years.

Mr Noonan said that the public finances are under control with the deficit falling below 3% this year, while debt levels are set to move down towards the European average in the next few years.

The minister added that net migration is expected to stop next year with a return to inward migration from 2017 onwards. 

Speaking about budgeting, Mr Noonan said there would be no return to the boom and bust model of the past.

He also said the Government was considering a range of options to strengthen the mortgage arrears framework in order to ensure that families in long-term arrears can find a solution.

He added that there would be a further announcement on this in the coming weeks.

Mr Noonan said that the number of arrears cases was falling but that there were still 37,000 accounts in long-term arrears of over two years.

The minister said there would be a particular focus on enhancing the role of the Insolvency Service and the range of solutions that become available through an insolvency arrangement.

Minister Noonan said the national debt peaked in 2013 and is on a firm downward path, and is expected to drop below 100% of GDP and move towards the EU average in the years ahead.

Taxpayers' money put into banks will be fully recovered

Mr Noonan said that the value of the State's investment in AIB, Bank of Ireland and Permanent TSB continues to rise and he added that it is not the State's intention to remain a holder of its banking investments in the long term.

"The sale of 25% of PTSB that concluded yesterday, further improves the position and I am fully confident that all the taxpayers' money investment in AIB, Bank of Ireland and PTSB will be fully recovered," the minister told the Dáil.

The minister also stressed that the 12.5% Corporation Tax rate will stay. "This is a red line for the Government", he stated.

"We have no reluctance to continue, in parallel with our European colleagues, in reforming Corporation Tax, but we will not, as many in opposition advocate, increase the 12.5% rate," he said.

Govt looking to increase spending: Howlin

The Minister for Public Expenditure and Reform said the Government is looking to increase current spending by between €600 and €750 million for 2016.

Brendan Howlin said the expansion would allow the Government to deal with underlying demographic pressures in key areas such as social protection, education and health.

He said, including these additional allocations, Government spending - excluding debt interest - would come in at just under a third of gross domestic product.

Mr Howlin reiterated the Government's commitment to pension provision.

He told the Dáil the country currently spends over €6.5 billion annually on pension provision. 

He said this was projected to increase by €200 million per year to 2026 as the population ages.

However, he said the Government was committed to pension provision and there was no threat to current schemes.

Mr Howlin also told the Dáil the way is clear to enter talks with unions on public service pay.

He warned, however, that it was prudent to plan for an orderly unwinding of the emergency provisions that had been introduced to deal with the hole in the public finances, which included pay cuts for public servants.

The public service had seen the beginnings of pay awards in the private sector over the past two years, he added.

Both ministers said the Government was aiming to have between €1.2 and €1.5 billion of fiscal space for Budget 2016.

They said the resources would be allocated on an equal basis between additional spending and reducing the tax burden on low and middle income earners.  

Additional investment may also be possible arising from reduced spending on unemployment payments as the numbers at work grow.

Opposition criticises Spring Statement

Fianna Fáil finance spokesperson Michael McGrath said the Spring Statement was an exercise in self congratulation and self serving with both ministers clapping each other on the back.

He said there is nothing new in the document that has been released today.

The Government, he said, has done enormous damage to the fabric of society, and with each passing month that the Government serves in office, the divisions in society are becoming deeper and deeper.

He said: "You're in denial about the many elderly people who are being denied access to nursing home accommodation."

He added: "If you consider a full Croke Park, multiple it by five, that's over 400,000 who are waiting today in this country for an outpatient appointment".

There has been a significant improvement in the number of people in employment, he said, but warned there is no room for complacency.

A far fairer way of giving money back to people would be to dismantle the Universal Social Charge, he said.

Fianna Fáil TD Sean Fleming accused the Government of standing down the Dáil from its proper business to discuss the Government's "financial envelope" for the next general election.

Sinn Féin finance spokesperson Pearse Doherty said the Government's plan benefits the wealthiest most.

He said it was [former finance minister Charlie] McCreevy-style politics delivered with a Limerick accent.

He said the Government has met none of the claims it made for itself on coming to office.

He said "what today is really about is a Government trying to get re-elected by promising the moon and the stars in their nod and wink fashion, having stolen the shirt off people's backs". 

Sinn Féin deputy leader Mary Lou McDonald said the Government has used the Dáil to "spell out your empty and meaningless promises". She said "you fool no-one but yourselves".

RENUA Ireland leader Lucinda Creighton said: "The Spring Statement should tell us where we want to be in two or five years' time.

"It should tell the working poor - be they public sector or private - how we plan to create a process of transformation that will allow them fulfil their potential.
 
"None of that appears in what is another list of scattered promises that offers us no roadmap to a genuinely better way of doing things.  A plan without an objective is merely a list of disorganized thoughts."

Mixed reaction among trade unions

Employers' group Ibec welcomed the Spring Statement, saying it provides scope for tax reductions and spending increases over the coming years.

However, the trade union Unite has expressed concern at what it called a "toxic low-tax, low-investment strategy".

Ibec said today's statement reflects the realities of an improving economy.

Chief Executive Danny McCoy said the Government is right to further reduce income tax.

He said the burden on many workers is too high but it would be wrong to take too many workers out of the tax net entirely - or to retain the marginal tax rate of 52%.

Ireland Secretary of trade union Unite Jimmy Kelly said: "The Government appears set for a re-run of the Fianna Fáil policy prior to the crash, reducing tax revenue to unsustainable levels at the expense of investment both in the productive economy and in the vital services on which we all rely."

Chambers Ireland has also welcomed the statement but has urged prudence particularly on public sector pay rises.

Chief Executive Ian Talbot said a mechanism must be put in place to link any future pay rises with increases in productivity.

The Irish Farmers' Association has urged the Government to prioritise the self-employed.

Reducing the income tax burden for all taxpayers, it said, is the fairest way to reflect the upturn in the economy.

Shift to longer-term budget planning

The Spring Economic Statement is an innovation in the Irish way of making budgets, but an economic statement six months before budget day is an established part of the political year in several countries, including France and Britain.

The Spring Statement also sets the tone for much of the political debate for the General Election, as its multi-year perspective defines much of the tax and spend landscape for the next government, whoever is in power.

The idea behind the Spring Statement is to focus political attention on the state of the economy twice a year, with the Spring Statement setting out the framework of what resources will be available, and the autumn budget filling in the detail of how they will be spent.

The Spring Statement is also part of a shift to longer-term budget planning. 

Along with new EU budget rules, the aim is to limit the damage caused by poor economic decision making by having a more rigorous analysis of tax and spending proposals, and the economic outlook required to sustain them.

Taoiseach Enda Kenny said the Spring Statement is an opportunity for Ministers Noonan and Howlin to set out where the Government "wants the country to be over the next number of years, to look back at the progress made and ahead to the challenges yet to come".

Speaking on his way into this morning's Cabinet meeting, Mr Kenny also said the two ministers would be engaging with trade unions to find a successor to the Haddington Road Agreement and to discuss the reforms necessary to increase efficiencies in the public sector.