State tax take above forecasts for month

INCREASED consumer confidence is thought to be behind better than expected tax returns for the government which will be announced later today.

Finance Minister Michael Noonan said figures for April would show a turnaround for government tax receipts.

Mr Noonan also said the eagerly-awaited “jobs initiative” would be unveiled next Tuesday but without a huge spend to back it.

But he said the expected increased tax take will support government plans to boost the country’s finances.

Mr Noonan told the Dáil that exchequer data for April, due out today, would show that tax revenues were above estimates and spending was less than forecast. The Government had pencilled in tax revenues of €1.861 billion for April.

Department of Finance sources pointed to March’s KBC/ESRI consumer confidence index which rose to 59.5, compared to 50.3 in February, as a possible factor for the better tax returns.

Meanwhile, next Tuesday will mark the announcement of the Government’s jobs initiative which is expected to include plans to restore the minimum wage, lower PRSI payments for employers and make grants available for businesses.

But Mr Noonan said the jobs programme would not be “a huge Keynesian initiative” and must be cost neutral under Ireland’s EU-IMF bailout agreement.

Employers group IBEC yesterday called for the reform of employment services, the welfare system and a new drive to get graduates and the unemployed into work, as part of the jobs initiative.

Mr Noonan said: “Based on our more recent conversations, the agreement we have with the troika [the ECB, EU and IMF] is that the span of the initiative is to become fiscally neutral by 2014. That satisfies it.

“It is not a big Keynesian initiative. The resources are not available to drive demand in the economy by huge investment. It is just not there...It is morale boosting and confidence building rather than a huge spend for demand purposes.”

The Finance Minister also admitted yesterday that under current regulations, public interest bank directors are not obliged to report to him and he is not permitted to give them direction.

Mr Noonan did say though that banks which were fully or largely supported by the state, could have the reappointment of directors vetoed by him through shareholders at annual general meetings.


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