Brian Cowen (Laois-Offaly, Fianna Fail)

We have had a strong budgetary position recently, bringing in surpluses in ten of the past 11 years, while also having an unprecedentedly large capital programme, enhanced by the national development plan, as well as increases in current expenditure. A significant amount of revenue comes in at the end of the year, in October and November, from the self-employed and in corporation taxes. We do not have a profile of receipts and expenditures month on month of the varying figures, taking into account that more than one quarter of our revenue arrives in the last six weeks of the year. That explains why one expects a significant reduction in the figure of €3.1 billion.

We had projected that tax receipts in 2007 would increase by 7.8% over last year's record levels. They were at a figure of 6.1% in the first six months but there will be a further drag going into the final three months. Even allowing for significant tax income in the last couple of months, on tax heads which are still holding up, we expect the total increase in tax revenue this year over last year to culminate at a figure of approximately 5.5% based on the information we have available to us after nine months. We will have a more accurate assessment as we get close to the budget.

Having left a surplus position moving into a year such as this in which receipts, for example, from the residential property market have reduced, we expect to come in with a surplus this year. We can still provide for maintaining the existing level of services this year, already at a record high, and look to the unified budget proposal on 5 December, where we will take taxes and expenditures together, to see how we can maintain the level of output and keep unemployment levels as low as possible.

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