Michael McGrath (Cork South Central, Fianna Fail)
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Question 83: To ask the Minister for Finance if, based on the end of June Exchequer returns, his views that the Budget for 2011 is on target in overall terms and, separately, with regard to income and with regard to expenditure. [19381/11]

Michael Noonan (Limerick City, Fine Gael)
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The Exchequer deficit in the first six months of the year, at €10.8 billion, was in line with my Department's expectations. Tax receipts in the period to end-June, at €15.3 billion, were almost 6% above the same period in 2010. They were however slightly below expectations with a shortfall of 0.7% or €115 million compared to profile being recorded in the first six months of the year.

While this shortfall must be viewed in the context of a target of almost €151⁄2 billion, it is the case that individual tax-heads showed a mixed performance in the period to end-June. Corporation tax and VAT were a little weaker than expected but on a more encouraging note, income tax was in line with target and excise duties recorded a surplus of €79 million.

Although certain tax-heads have shown some signs of weakness, the Budget day target for tax revenue in 2011 of €34.9 billion remains valid, especially given the expected boost to taxes this year from the pension levy introduced to fund the Jobs Initiative.

On the expenditure side, overall voted expenditure was managed within the limits set out in the first half of the year and was 11⁄2% below profile. This reflects the ongoing tight control of public spending, which we must ensure is maintained over the coming months.

The anticipated end-year voted expenditure position remains in line with target although pressures emerging in some areas will have to be managed from within existing resources. The Department of Public Expenditure & Reform is working with Departments to ensure that this is the case.

The Stability Programme Update published at end-April projected an Exchequer deficit of €18.2 billion in 2011, notwithstanding the requirement for the Exchequer to part fund the recapitalisation of the banking sector. That estimate remains valid at this time.