Michael Noonan urged to exercise restraint as buoyant tax take beats expectations

Finance Minister Michael Noonan has been urged to wait two more months before making any decisions on extra spending in the budget to allow the full extent of Brexit’s impact on the Irish economy to emerge.

Fianna Fáil finance spokesman Michael McGrath made the call last night after exchequer returns showed Ireland’s economy is ahead of target, sparking suggestions of an expansionary budget for 2017.

For the first half of the year, tax revenues are up 3.4% on what was expected and 9.2% on the same period last year, with tax receipts €742m ahead of target.

Corporation tax intake stood at €2.67bn for the first six months, up €505m or 19% above what was projected, while there was positive news for both the indigenous and external Irish markets.

Speaking at the launch of the figures alongside Public Expenditure Minister Paschal Donohoe yesterday, Mr Noonan said the results “show our plans to fund vital public services are on track”.

He added that “collecting revenues from a broad base continues to pay dividends for Irish taxpayers”.

Mr Donohoe said the majority of government departments — with the exceptions of health, justice and other areas — are staying within their budgets.

“We are now halfway through the year and just under 50% of departmental allocations spent. For the second half of the year ministers and departments are conscious of the importance of managing the delivery of public services within their annual allocations,” he said.

The latest results offer positive news for an Irish economy that could be at risk from the British vote to leave the EU.

However, while welcoming the positive figures last night, Mr McGrath said Government must still be cautious and not use the latest exchequer figures to allow for increased spending in the budget before the full extent of Brexit fallout is known.

“Overall the exchequer returns have been quite impressive, but they don’t in any sense capture the impact of Brexit,” he said.

“We should reserve major decisions on the budget until September to allow a couple of months to see what affect Brexit has on us, particularly on the indigenous economy. The budget isn’t due until mid-October, and the exchequer returns are positive. But the truth is neither the Government nor the opposition know the extent of Brexit right now, so we should be careful about talking about an expansionary budget for now.”


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