Peadar Tóibín
Question:117. Deputy Peadar Tóibín asked the Minister for Finance the forecasted budget surplus or deficit for the Exchequer in 2023; and if he will make a statement on the matter. [21596/23]
View answerTuesday, 9 May 2023
Questions (117)
Written answers
Economic and budgetary forecasts covering the period 2023-2026 were set out in the Stability Programme Update which was published and submitted to the European Commission and Council last month.
My Department is forecasting an Exchequer surplus of just over €4.5 billion this year. The general government surplus, which is the preferred metric both nationally and internationally for the fiscal position, is forecast at €10 billion, the equivalent of 3½ per cent of modified gross national income.
The headline surplus in prospect for this year is largely the result of ‘windfall’ corporate tax receipts, in other words receipts that cannot be explained by underlying economic conditions. These windfall receipts are highly concentrated among a small number of multinational firms, and cannot be relied upon to continue indefinitely.
Windfalls are estimated at almost €12 billion this year, meaning an underlying general government deficit of €1.8 billion for this year. This is a better metric for assessing the resilience of our public finances.
The Government has repeatedly warned that it would be inappropriate to build up permanent fiscal commitments on the basis of transitory, windfall revenues. Accordingly it is my intention to establish a longer-term savings fund, capitalised by these windfall receipts. The fund will be used inter alia to partly finance the budgetary costs associated with an ageing population.