Neutral budget can still meet 3% target

The latest Exchequer figures show that the Government can deliver a neutral budget in two weeks and meet the 3% fiscal deficit target agreed with the Troika.

Total expenditure for the first nine months of the year reached €42.1bn, compared to €36.1bn. The €6bn deficit is a €1.2bn rise on the same period last year. Tax revenues came in at €28.8bn, up 7.4% compared with last year. This performance is €703m ahead of profile. Most categories performed well, including Vat and excise duty, which were both up 6.5% over the 12 months — reflecting more buoyant domestic demand. Income tax was up €956m for the year and is running €136m ahead of profile.

The Government is coming under increasing pressure to ease the tax burden on lower and middle-income earners in the budget. However, the European Commission, IMF, and the Irish Fiscal Advisory Council have all urged the Minister for Finance, Michael Noonan, to introduce €2bn in consolidation measures.