Kathleen Lynch (Cork North Central, Labour)
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Question 123: To ask the Minister for Finance if he will make a statement on the Exchequer returns for the first quarter of 2005; the steps being taken to address the continuing reduction in capital spending, in real terms. [13348/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I have already issued a press statement regarding the end of March Exchequer returns, which is available on my Department's website.

As stated in the press statement, an Exchequer surplus of €880 million was recorded in the first quarter of 2005. Tax receipts were €221 million or 2.5% ahead of profile, due largely to the better than anticipated performance of VAT. The end of March Exchequer returns also showed that net issues to Departments and offices were €438 million below the published expenditure profile. This was primarily attributable to timing factors.

Provision for public capital investment has been maintained in recent years at or close to 5% of GNP or around twice the EU average and this is continued in the rolling five year multi-annual capital envelopes introduced in budget 2004. The innovation under the capital envelopes of allowing Departments to carry over unspent voted Exchequer capital to the following year, €237 million from 2004 to 2005, is designed to optimise spending of capital allocations. The variation with profile of voted capital spending at end March was primarily due to timing factors and expectations at this stage are that spending for the year will be in line with target.