Written answers

Tuesday, 8 April 2014

Department of Finance

EU-IMF Programme of Support

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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16. To ask the Minister for Finance the extent to which budgetary projections have remained on target since exit from the bailout; if particular issues have arisen which might need particular attention in the future; and if he will make a statement on the matter. [16185/14]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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As the Deputy will be aware, this Government has met all of its targets to date and has achieved substantial progress in setting the public finances and the economy back on the road to good health and this has been acknowledged by the European Commission, the International Monetary Fund, the European Central Bank and most economic commentators. 

The Exchequer statement for the first quarter of 2014 was published last Wednesday, 2nd April 2014 by my Department and the Department of Public Expenditure and Reform. The Exchequer Statement showed that the Exchequer deficit at end quarter 1 2014 stood at €2,316 million, which represented an improvement of €1,379 million compared to quarter 1 2013. 

 Budget 2014, forecasted tax revenues of €40,040 million in 2014, and our target for the first quarter of 2014 was €8,975 million. Tax revenues of €9,232 million were collected at the end of the quarter 1, an increase of €415 million or 4.7% on the same period last year and €257 million or 2.9% above profile. 

Post publication of the Exchequer Returns, the Central Bank informed my Department of a discrepancy in the Exchequer returns.   The overall level of tax collected is unchanged. For example, in March,  €101 million of revenue was attributed to VAT that should have been attributed to income tax.  The Department, the Revenue Commissioners and the Central Bank are currently examining the issue and a revised Exchequer statement will issue in due course.

   While expenditure is primarily a matter for the Minister for Public Expenditure and Reform, it is also worth pointing out that at the end of quarter 1 2014, expenditure on public services is within Budget. Total net voted expenditure of €10,264 million was down €631 million or 5.8% in year-on-year terms and €261 million (2.5%) below profile.   

As I stated in relation to the end-March Exchequer Statement, performance in the first quarter of 2014 highlights that the Government s plan to restore order to our public finances is working. Tax revenues continue to grow in line with profile and expenditure on public services is within Budget. 

Notwithstanding this solid start to 2014, we have to continue to reduce our level of spending and increase the amount of revenue we collect in order to close that gap further and ensure the sustainability of the public finances.   

Finally, my Department will produce updated macroeconomic and budgetary forecasts in   the Stability Programme Update to be published later this month.  These will take account of the latest economic and fiscal data and will give updated deficit projection over the forecast horizon.

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