Fiscal Policy.

Dáil Éireann Debate, Wednesday - 23 June 2004

Wednesday, 23 June 2004

Questions (54, 55, 56)

Ciarán Cuffe

Question:

40 Mr. Cuffe asked the Minister for Finance the plans he has to increase public spending in view of the fact that Exchequer returns exceed expectations. [18708/04]

Bernard J. Durkan

Question:

42 Mr. Durkan asked the Minister for Finance the degree to which Government expenditure to date in 2004 is in line with targets; and if he will make a statement on the matter. [18634/04]

Eamon Gilmore

Question:

67 Mr. Gilmore asked the Minister for Finance the main features of the Exchequer returns for the first five months of 2004; the way in which spending and the tax take for the first quarter compares with the projected levels; if he intends to review any of the budgetary targets for 2004 in view of these returns; and if he will make a statement on the matter. [18589/04]

Written answers

Minister for Finance (Mr. McCreevy)

I propose to take Questions Nos. 40, 42 and 67 together.

The full, detailed Exchequer statement is published on my Department's website each month. The Exchequer balance for the first five months of 2004 showed a deficit of €0.5 billion. My Department's budget day forecast is for a deficit of €2.8 billion for the year as a whole. At the end of May there was a current budget surplus of €0.7 billion and a capital budget deficit of €1.2 billion.

At the end of May 2004 — the latest date for which figures are available — tax receipts amounted to €13.3 billion, which is €0.6 billion, or 5%, ahead of the Department's tax profile published in January. The bulk of the excess was due to a better-than-expected performance from income tax, which was €252 million over target and included once-off receipts from special investigations such as the Offshore Assets Group investigation, and capital gains tax, which was €241 million over target. The bulk of the capital gains tax excess occurred in the first quarter of 2004 with receipts since that time slowing down. This slowdown is expected to continue. Stamp duties and VAT were ahead of profile to the end of May and excise receipts were on target, but corporation tax receipts were behind profile.

Overall net voted spending, at €12.2 billion, was €0.6 billion, or 5.2%, below the Department's spending profile. Both current and capital spending were behind profile, which is a reflection of a range of timing factors. The budget 2004 spending projections for each Department were updated in the 2004 Revised Estimates for Public Services which were published last February. The REV provided €32.9 billion for net voted spending on departmental services in 2004. My expectation is that the overall and departmental spending outturn will be broadly in line with the February target.

I have no plans to increase public spending over the substantial provisions in the 2004 REV and, as I indicated in a reply to a previous question, it is neither practical nor prudent to adjust tax rates between budgets.

Question No. 41 answered with QuestionNo. 8.

Question No. 42 answered with QuestionNo. 40.

Question No. 43 answered with QuestionNo. 8.