It promised to be the last of the "cheeky Charlies" and the Minister for Finance did not disappoint. But Mr McCreevy may have spoken a little to soon when he said he will not borrow in 2002.
His projected Exchequer surplus of €170 million (£134 million) is minuscule in the context of the Government's finances and comes with both a specific and general health warning.
Included in the figure is a unspecified amount for the outcome of the benchmarking exercise currently being carried out on public sector pay by an independent commission. It will report next year and the only certainty is that it will lead to fresh pay demands from the public sector. The cost of settling these claims is an imponderable, the Minister admits.
The surplus also carries the more general caveat about the difficulty of making any forecasts in the current climate of economic uncertainty. As Mr McCreevy found to his cost this year, it does not take much to throw the most carefully worked forecasts into disarray. It would take only one shock along the lines of the foot-and-mouth scare to turn the small surplus into a deficit. Similarly, another incident along the lines of the September 11th attacks on the US would count Ireland's Budget surplus among its collateral damage.
The fragile nature of the surplus that Mr McCreevy is predicting indicates that it is more to do with the optics of Budget Day and the coming election than the reality of the Government finances. Mr McCreevy's determination to approach the coming election without having to mention the B word seems to have been behind the use of an array of tricks to balance the books.
The extent to which they disguise the true position of the economy is underlined by the economic projections for 2003 and 2004 that are contained in the supplementary Budget documentation.
The Stability Programme update for December 2001 - effectively the Government's report to Europe on the Budget - predicts that Ireland will run General Government Deficits in both 2003 and 2004 which will be 0.5 per cent and 0.6 per cent of Gross Domestic Products respectively.
The General Government Deficit measure used by Europe is a more generous measure than the Exchequer surplus. It allows the Government to add back in some elements of expenditure such as the contribution to the National Pension Reserve Fund.
By way of example, the €170 million Exchequer surplus that Mr McCreevy is predicting for this year equates to a General Government Surplus of €837 million, or 0.7 per cent of GNP.
It follows then that General Government Deficits of 0.5 per cent on 0.6 per cent imply Exchequer deficits of a considerably larger magnitude, and with them will have to come borrowing.
Mr McCreevy or his successor will be hard put to find anything like the €2.5 billion that the Minister has pulled out of the hat this year to avoid borrowing.
The Central Bank coffers will not be of as much use next year. The decision to transfer to his office the "seigniorage" rights over Irish coin will produce some recurring income, but nothing along the lines of the €240 million that it will generate this year. The money represents the profit that the bank makes from producing coin. It effectively sells coin to the banks at face value and the difference between the face value and the small cost of producing the coins is retained by the bank. The money to be transferred this year represents some 53 years' worth of accumulated profits. The annual profit is around €34 million.
The other mechanism that has been used to liberate some of the |Central Bank's cash is much more of a once-off. It represents the value in euros of the Irish banknotes that the bank estimated will never be exchanged for euros. Provided the board of the bank agrees the cash that is held by the bank to back up the notes can be reduced by a similar amount and handed over to the Government. Technically, the banks liabilities are reduced by €250 million, which has the effect of boosting profits, which are paid to the Government every year, by the same amount.
The two funds that Mr McCreevy raided this year would not be able to withstand a similar assault next year. The Capital Services Redemption Account is where the Government salts away any surplus cash it might have in order to meet debt repayment costs.
The option to take €500 million out of the account next year was only made possible by the decision not to dip into it this year. Once again this is not a option that will be available next year.
Similarly, the €635 million surplus on the Social Welfare Fund that will be drawn down next year will not be available in 2003.
This surplus was accumulated during the last couple of years as the number of unemployed and other benefit drawers shrank and the number of people at work - who contribute to the fund via PRSI - grew.
That situation will reverse next year, with the number out of work predicted to rise.
The only measure that Mr McCreevy can hope to replicate is the cash flow benefit of advancing the payment date for corporation tax. The estimates published yesterday indicate that the €792 million that will bring in 2002 will rise to €821 million in the following year.
The merits of what Mr McCreevy has done will be debated over the coming days. He will no doubt say he has delivered - in accounting terms - the neutral budget that most commentators were seeking. The reality of what he has done will take longer to manifest.