Government gets boost from exchequer data
Tax revenues almost exactly on target, while spending below expectations
Minister for Finance Michael Noonan and Minister for Public Expenditure and Reform Brendan Howlin at a press conference at the department to outline the third-quarter exchequer returns. Photograph: Frank Miller/The Irish Times
The Government has received a timely boost ahead of this month’s budget with the latest exchequer numbers indicating it is on course to hit its main fiscal targets for the year, and new Live Register data showing unemployment at a 3½-year low.
Exchequer returns for the nine months of the year to the end of September showed tax revenues were almost exactly on target, while spending was running below expectations.
The figures, which will be central to the budgetary arithmetic, showed the State took in €26.8 billion in taxes so far this year, up 2.9 per cent on the same period last year, and €4 million ahead of target.
This gave rise to an exchequer deficit at the end of September of €7.1 billion, which was €4 billion lower than at the same stage in 2012.
Income tax, the largest single source of revenue for the exchequer, raised €10.8 billion in the first nine months of the year, coming in 0.7 per cent or €81 million below target.
The Department of Finance attributed “this slight under-performance” to weaker-than-expected receipts from Deposit Interest Retention Tax (Dirt), linked to lower interest being earned on cash on deposit in banks.
VAT receipts for the nine-month period totalled €8.4 billion, representing a shortfall of €165 million (or 1.9 per cent) against target, reflecting weak retail sales.
However, the department said VAT receipts had picked up substantially in July and August on account of the good weather and the new seasonal pattern of car sales.
VAT receipts for September were €1.6 billion, which was €80 million or 5.2 per cent ahead of the department’s monthly target.
The shortfall in income tax and VAT was largely offset by a better-than-expected performance in corporation tax, which came in €239 million (10 per cent) ahead of the €2.4 billion target for the nine-month period.
Local property tax receipts also boosted Government coffers, netting the exchequer €200 million so far this year, €80 million or 66.6 per cent ahead of target. Net voted expenditure was 2.7 per cent below target, at €31.6 billion, at the end of the nine-month period, and 4.9 per cent down year-on-year.
“We’re on target to meet the deficit target for 2013 of 7.5 per cent”, as required by the State’s bailout programme, Minister for Finance Michael Noonan said.
The latest Live Register numbers, released separately yesterday, indicated the State’s unemployment rate fell to 13.3 per cent last month, its lowest level in more than 3½ years.
However, experts warned the figures were being masked by high levels of emigration and the limited periods people are able to sign on.
The figures showed the number of people claiming unemployment benefits dropped by 1,800 in September, the 15th successive monthly decline, bringing the overall number of claimants to 414,300 at the end of September.
The unemployment rate, based on the Live Register, which includes part-time and seasonal workers as well as those on Jobseeker’s Allowance, has declined slowly but consistently since its post-crash peak of 15.1 per cent in February last year.
Over the past 12 months, the number on the register has dropped by 20,665. However, the number of long-term claimants – those signing on for more than a year – remains stubbornly high, accounting for 46.2 per cent of the total.
In September, the number of long-term claimants was 188,881, down 2 per cent (3,897) on an annual basis.
Minister for Social Protection Joan Burton said while the numbers out of work were still far too high, the Government was making “sustained and welcome progress”.