Mr. Seamus McCarthy:

I thank the Chairman. I will commence by speaking about the finance accounts. The annual finance accounts present the receipts into and issues from the Central Fund of the Exchequer, together with a set of statements that itemise the transactions. The financial statements of the national debt, which are prepared by the National Treasury Management Agency, are presented in full as Part 2 of the finance accounts.

The finance accounts provide a statement of Central Fund transactions on a cash basis and are not a comprehensive set of annual financial statements for the State or central government. All revenues of the State are paid into the Central Fund of the Exchequer, unless otherwise determined by law. Examples of State revenue which is not paid directly into the Central Fund include PRSI receipts which are paid into the Social Insurance Fund and the proceeds of motor tax which are paid into the local government fund.

The chapters that are the subject of today’s meeting were compiled to highlight key aggregates and trends in Central Fund transactions and in broader State liabilities.

Chapter 1 summarises the Exchequer outturn for 2015. Receipts in 2015 totalled €58.6 billion, representing an increase of €8.9 billion, or 18%, compared with 2014. This was mainly due to increases in tax revenues of €4.3 billion and a number of one-off capital receipts totalling €3.6 billion.

Issues from the Central Fund in 2015 of €58.7 billion were €750 million or 1.3% higher than in 2014. The movement in Central Fund receipts and issues is shown in the diagram which is now on screen. This indicates that in 2015 the Exchequer deficit was almost eliminated - the shortfall for the year was just €64 million. This compares to an Exchequer deficit of €8.2 billion in 2014.

Members may wish to know that I issued my audit report on the finance accounts for 2016 last week. It is the Department's responsibility to present the accounts to Dáil Éireann.

In chapter 2 of my report, I outline the trends and composition of Government debt and the cost of debt servicing. The most comprehensive measure of Government debt is general Government debt. This is an internationally standardised measure of the total gross debt owed by all Government bodies to third parties outside government. At the end of 2015, the general Government debt stood at just over €200 billion. There was a very small decline in the level of debt year on year. However, the ratio of general Government debt to GDP declined to 79% at the end of 2015 from 108% at the end of 2014. This sharp reduction reflected an exceptional increase in the estimated value of Ireland's GDP in 2015, attributed to the activities of a small number of large multinational firms, including the relocation to Ireland in 2014-15 of a few big economic operators.

The main component of Ireland's general Government debt at the end of 2015 was the gross national debt. This is the cumulative borrowing undertaken by the National Treasury Management Agency on behalf of the State.

Gross national debt stood at €196.6 billion at the end of 2015, down marginally from the end of 2014. The cost of servicing the national debt fell by 6% to €7.1 billion in 2015. This reflected a fall in the estimated average cost of servicing the debt, from 3.8% at the end of 2014 to 3.5% at the end of 2015. By June 2016, the average had fallen further to 3.4%.

Turning now to chapter 18 in relation to the Irish Fiscal Advisory Council, the Fiscal Responsibility Act 2012 requires me to report to Dáil Éireann with respect to the correctness of the sums brought to account by the council each year. Chapter 18 is my report for 2015. My report on the audit was issued on 30 June 2016 and I gave a clear audit opinion. Expenditure by the council in 2015 amounted to €823,000.

The 2015 appropriation account for the Vote of the Office of the Minister for Finance records expenditure totalling €26.3 million on five programme areas. The expenditure on financial services policy recorded in the appropriation accounts is €7.6 million. However, it should be noted that this does not include costs associated with staff who are seconded to the Department from the NTMA to deal with banking sector issues, and certain related consultancy costs. Those costs are borne by the NTMA and are not recouped from the Department. The level of costs in that regard is not disclosed in either the appropriation account for Vote 7 or the NTMA's financial statements. At the end of 2015, a net €6.1 million was liable for surrender from Vote 7 back to the Exchequer.