Brian Lenihan Jnr (Dublin West, Fianna Fail)

Generally, the monthly figures are posted on the departmental website. They are not the subject of a separate presentation by the officials or briefing to the Minister. If there were anything out of the ordinary in them, the Minister would be briefed about them specifically. In the case of this month, there is nothing out of the ordinary in the forecasts. As I made clear at the end of September, I anticipated a €2 billion shortfall in tax. The tax receipts disclosed in the end-October receipt side are broadly in line with that forecast. Therefore, to answer the Deputy's question, the drop is of the order of €2 billion on the April forecast.

On the matter of the Deputy's general thesis on the operation of deflation in the economy, she is laying far too much stress on budgetary considerations as a motor for deflation in the economy. I will illustrate that point in one way. On the tax side, our estimation this year is that the number of income earners who will fall outside the income tax net will be of the order of half the income earners in the State. That will be an increase from the 39% or 40% forecast in the October budget last year. Equally, those on the top rate, some 21% in the forecast last year, have fallen to 10%. All that suggests a substantial wage adjustment has taken place in the economy in response to international developments. That wage adjustment does not always illustrate itself in CSO analyses of pay rates because they are often based on basic rates. However, we know that a great deal of private sector remuneration took the form of overtime, bonuses or additional remuneration. That features somewhat less in the public sector but reductions in that respect in that sector have been also a significant factor.

That huge wage adjustment is one reason we have witnessed the amount of deflation that has occurred in the economy. The other factor in this context, which the Deputy neglected to mention, is the enormous depreciation in sterling that has taken place. That was already under way in 2008, but that has fed into cheaper import prices within the State this year because our trade position with Britain is in deficit. We buy more from Britain than we export to it. Therefore, any depreciation in sterling has a knock on effect in terms of a fall in the current standard of living in Ireland.

See this speech in context