THE PUBLIC finances were broadly on target at the end of the third quarter of the year, according to the Department of Finance. As a result, all the quantitative budgetary targets set out in the EU-IMF bailout had been met, officials from the Department said yesterday.
The monthly exchequer returns are the most timely indicator of the state of the public finances, albeit an imperfect one as they do not cover significant areas of Government revenues and spending which are outside the remit of the exchequer.
Tax revenues in September, at €3.6 billion, were the highest monthly inflow to date in 2011. Compared to September 2010, revenues were up by 10 per cent.
The growth last month was mainly due to the collection of the Government’s pension levy, imposed on private pension funds as a means of financing the Coalition’s job creation initiative. According to the Department of Finance, the pension levy generated €457 million, all of which was collected last month.
Excluding this revenue source, which was not anticipated when the budget projections were framed last December, total tax revenues were down very slightly on September last year.
Including the pension levy, cumulative tax revenues in the first nine months of the year were marginally ahead of projections.
Most of the main tax revenues have been at or ahead of target over the course of the year. Value added tax has been an exception, with the divergence from target growing wider during the year.
September marked the fourth consecutive year on year monthly decline in VAT revenue. This reflects weakness in the domestic economy and consumer spending.
On the expenditure side, underlying spending is marginally down as most Government departments have reduced outlays. The higher spending departments have been the exception.
Owing to costs associated with the banking crisis, total exchequer spending exceeded total revenues by €20.7 billion in the first nine months of 2011. This was sharply up on the €13.4 billion imbalance in the same period of 2010.
Excluding the impact of banking related expenditure the exchequer deficit in the period to end-September was over €3 billion lower than it was in the same period last year.
Minister for Finance Michael Noonan said: “This shows that real progress is being made in returning our public finances to a more sustainable position.”
