Cabinet expected to approve actions planned for budget
THE CABINET is expected to approve the overall expenditure measures for next week’s budget at the weekly meeting of Government Ministers today.
While the meeting is taking place in advance of tomorrow’s publication of the exchequer returns until the end of November, the decision on where to apply €4 billion in cuts in the budget does not rely on the latest data on State revenue and expenditure.
However, there is a small degree of uncertainty over whether a final sign-off will be achieved or not. This is due to the impact of last week’s one-day strike by public sector workers.
It came as Taoiseach Brian Cowen and Minister for Finance Brian Lenihan, accompanied by officials, held what was thought to be their weekly meeting on the upcoming budget at Farmleigh yesterday, ahead of the Taoiseach’s visit to London.
The Monday meetings, which commenced in October, have focused upon trying to ensure the unprecedented austerity measures to be announced next week will be perceived by the wider electorate as fair. Following last year’s debacle over the withdrawal of medical cards for over-70s, Mr Cowen’s and Mr Lenihan’s deliberations have focused on making sure that cutbacks are not seen as disproportionately affecting the most vulnerable.
Another key element of the budget is expected to be a strong jobs stimulus package. There has been growing expectation a major component will be an ambitious home insulation and retrofit scheme with potential to pump billions into the construction sector.
The November exchequer figures are the most important of the year as they include all the tax returns from self-assessed taxpayers as well as VAT returns.
According to informed sources, expenditure is expected to be a little below forecast because of lower-than-expected unemployment.
Nor is the Government expecting any new dip in tax revenues. The projected total for tax revenue for 2009 was revised downwards at the end of September by €2.2 billion, from €34.4 billion to €32.2 billion.
At the end of October, a shortfall of just over €1.05 billion was recorded with the September projection predicting a further €1.15 billion shortfall in revenue during November. At the publication of the pre-budget outlook, senior Department of Finance officials said they did not expect further downward revision.
However, Labour finance spokeswoman Joan Burton said yesterday the disclosure by Government that the Revenue Commissioners have paid almost €1.6 billion in tax refunds to date this year did not bode well for the November exchequer figures.
Ms Burton said that figure – which reflects losses by companies and individuals which had traded profitably in previous years – was one of the key factors behind the continuing plunge in net tax receipts.
She said 11 corporation tax refunds amounted to more than €10 million and that a few had been for over €25 million.
Of the over 200,000 refunds, she said a significant proportion related to property, construction and banking.
Ms Burton said she expected a further plunge when the November figures are announced tomorrow, as a result of growing losses among, and refunds paid to, self-assessed taxpayers.