John O'Mahony (Mayo, Fine Gael)
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Question 219: To ask the Minister for Finance his views on the most recent set of Exchequer returns; his further views on whether Budget 2008 targets in relation to Government spending are being maintained; and if he will make a statement on the matter. [23634/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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In terms of Government spending, the end-May Exchequer returns showed that expenditure was broadly on target for the first five months of 2008. The 2008 spending plans were set out in detail in the Revised Estimates for Public Services 2008 which were published on 21 February 2008. While the fiscal position has weakened from that envisaged at Budget time, this has to be considered in the context of the strong position of the public finances such as our low debt to GDP ratio.

The most recent Exchequer returns for the period to end-May showed that there was an Exchequer deficit of €3,598 million. Taxes were €1,166 million or -6.4% below profile and down 8% on a year-on-year basis. This shortfall will not be recovered later this year. The weakness in taxes, particularly on VAT, CGT and Stamp Duty receipts, reflect a number of factors namely, the substantial adjustment in the housing market, the ongoing difficulties in the international financial markets and slower domestic economic activity such as weaker retail sales. The overall prospects for 2008 will be assessed in the context of the Exchequer returns to the next end quarter (end- June) at which stage the usual statement will be made.