Minister for Finance Paschal Donohoe has secured an additional €300 million from Government coffers to pay for the upcoming Christmas bonus to welfare recipients and the water refund payments.
The extra money, contained in the Department of Finance’s pre-budget White Paper, was generated from existing resources, the department said.
It brings the Government’s spending estimate for 2017 to €51.2 billion, which is higher than previously signalled in its Summer Economic Statement.
The new estimate won’t impact the measures to be announced in Tuesday’s budget or the fiscal space for next year.
The White Paper on Estimates of Receipts and Expenditure, published late on Friday night, contains the department’s projections for tax and spending this year and next. It effectively lays out the Government’s pre-budget starting position.
The paper suggests the department is now expecting to run a budget deficit of 0.3 per cent of gross domestic product (GDP) this year instead of the 0.4 per cent previously forecast, ahead of achieving a balanced budget next year. Based on September’s exchequer data, the department expects tax revenue for the year to be €50.6 billion, unchanged from the Budget 2017 forecast.
The latest exchequer returns, published on Tuesday, show the Government has so far collected just over €35 billion in taxes, some €212 million less than expected.
However, Department of Finance officials are confident this gap will unwind by the end of the year on foot of more buoyant income tax receipts from the self-employed in November.The pre-budget White Paper also expects capital spending for 2017 to be €5.3 billion. This raises the base for next year, with net capital spending of €5.9 billion now expected.
The Department also projects an increased contribution to the EU budget, up to €2.6 billion next year, from €2.3 billion this year, based in large part on our revised national income figures. The Department’s forecasts are based on GDP growth projections of 4.3 per cent this year, falling to 3.5 per cent next year.
