Exchequer back in black with €843m
Exchequer returns for November, published last night by the Department of Finance, show that the public coffers moved into surplus last month compared to a €2.1 billion deficit at the end of October.
Finance Minister Charlie McCreevy was also rewarded with a near 10% jump in tax revenues compared to a forecasted 8% rise on Budget day last year.
The main tax headlines showed growth, though income tax, up 1.7%, was well below Department forecasts. Officials at the Department are expecting a €500m shortfall in tax revenues this year.
But a surge in house buying has led to a 9.6% rise in VAT receipts to €9.3 billion and a 45% rise in stamp duty to €1.54 billion.
The take from capital gains taxes is bigger than expected, with €1.3 billion nearly twice the figure for the corresponding period last year.
Overall tax receipts were up from €27.1 billion to €29.7 billion, while the Government spent a total of just over €30bn since the beginning of January.
Mr McCreevy has forecast an overall deficit for this year of €1.5 billion.
It will be the first time since Minister McCreevy delivered a budget that he will be facing a deficit. At 1.4% of GDP there is plenty of scope for the Minister to borrow further next year to spend on vital infrastructure products without breaching the rules of the now defunct EU Growth and Stability Pact.
Economists said Minister McCreevy is unlikely to lay his hands on extra money as he did last year by raiding the social insurance fund and Central Bank coin reserve, but may find “magic” money to keep to his borrowing targets.
Opposition parties last night claimed that Government was only able to come in close to target as a result of cuts to capital spending, which was down by just over 13% on last year.
However, Department of Finance officials expect all Government departments to meet their spending targets by the end of the year.
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