asked the Minister for Finance if, in view of the fact that the Exchequer returns to 11th April, 1975, disclose a situation which is less favourable to the extent of £50.7 million than at the corresponding date last year, he will state whether the deficit on current account this year is now estimated to be greater than was forecast in the budget.
Ceisteanna—Questions. Oral Answers. - Current Account Deficit.
39.
I assume that the Deputy is referring to the fact that, between 1st January and 11th April this year, the amounts shown in the Exchequer return for total expenditure on central fund services and supply services less total revenue exceeded the corresponding amount for the relevant period of 1974 by £50.7 million.
The projected current budget deficit, 1975 is equal to the difference between anticipated current expenditure and revenue for the year as a whole, whereas the expenditure on supply services in the return referred to by the Deputy includes expenditure on voted capital services—which is outside the ambit of the current budget.
It will, in any event, be appreciated that, as considerable fluctuations occur in the budgetary position during the course of a year because of a number of factors, including differences in the timing of payment of expenditure and receipts, the budgetary position in the early part of a particular year will not necessarily reflect the eventual out-turn for that year as a whole.
Is the Minister satisfied that his budget estimate of the deficit for the current year will be adhered to?
That would be the hope.
It may very well be and, perhaps, the Minister might even hope the figure would be reduced but in the light of the figures to which Deputy Dowling refers—these indicate a trend and the latest figures indicate a much worse trend, £57 million as against £15 million—is the Minister satisfied that his estimate can be maintained?
The Deputy will appreciate that it was anticipated that in the earlier part of the year the tax revenue would be a great deal less than in the latter part of the year, having regard to the fact that the sixteenth round national pay agreement would come into operation only for the latter quarters of the year and that other incentives such as the tax concessions and so on would become applicable only for the later part of the year. It would not be right at this stage to assume that tax revenue for the remainder of the year would be related to that for the first quarter.
Would the Minister read any significance into the fact that for the same period last year receipts into the Exchequer were considerably in excess of expenditure out of the Exchequer whereas this year the reverse is the position and that already this year the Exchequer is £57 million worse off in regard to receipts and expenditure?
The figure is £50.7 million.
The latest figure is £57 million.
The figure has taken into account also the difference in holiday periods in the two years. Because of the difference this year between the date of Easter compared with last year there were fewer days worked but our economy, in common with the economies of the western world, is experiencing a situation in which tax buoyancy is not as great now as it was in other years. This is because of the decline in economic performance which, in turn, is a reflection of the world position but it would be wrong to carry over into the second half of 1975 the poorer performance which we experienced in the first quarter of the year. The situation is very likely to improve in the latter half of the year.
(Dublin Central): The Minister says that a lowering of income can be expected at this time of the year but is he not aware that the VAT returns for the Christmas period are included in this year's accounts? Therefore, should there not be a buoyancy in the earlier part of the year? January at least should not show a falling off.
All of those factors were taken into account in estimating what would be the income this year but it can be said at present that for the full year the figures are not off target.