Budget moved to October amid economic gloom

The Government has decided to move the Budget forward to October 14th in the face of the deteriorating economic situation.

The latest official exchequer figures, which were released yesterday, reveal that tax revenues are continuing to plummet. In July, the Government projected a tax shortfall of €3 billion for the year, but a rapid slowdown in consumer spending and a fall in stamp duty and capital gains tax receipts means that the shortfall for the year could exceed €5 billion.

The Government made the announcement that it was moving the Budget from December in a statement this afternoon amid growing criticism of inaction in the face of a sharp economic downturn.

The statement said the Government had taken the decision after reviewing the economic climate at a Cabinet meeting this morning and in the face of “unprecedented set of unfavourable international factors including turbulence in global financial markets, faltering economic growth in the major economies, exchange rate shifts and the sharp rise in commodity”.

The statement said the early Budget will “reflect the necessary prioritisation of expenditures in the light of expected tax revenues” and will give clarity and confidence to investors and taxpayers alike.

Ministers are developing specific initiatives to encourage investment and activity and deepening Ireland’s competitiveness. Details of these will be announced in the weeks and months ahead, the statement added.

Minister for Finance Brian Lenihan said: "Over the summer, we have been implementing our savings package and monitoring the emerging economic position.

"Weaker international conditions including slower growth and the impact of the credit crisis, combined with the developments in the housing market in Ireland, are having a major impact," he added.

Mr Lenihan said he will set out steps to "stabilise and restore balance to the public finances" adding that Ireland was better-placed than most economies to meet the challenges ahead.

Speaking to RTÉ, Mr Lenihan said: "We cannot let our State to drift into fiscal unsustainability. We have to take corrective action."