State gave Irish Water €100m in 2015 to cover funding gap

The Government gave Irish Water nearly €100 million in working capital last year to help it bridge the shortfall left by the non-payment of bills, Department of Finance papers revealed last night.

They also showed Irish Water paid the State €6.2 million in interest and guarantee fees on loans that helped the utility fund the installation of water meters around the country.

Minister for Finance Michael Noonan last year converted €54 million worth of debt owed by Irish Water to the State into equity in the company, according to the Department of Finance's official accounts. They show that Irish Water had paid the State €669,000 in interest on the convertible loan beforehand and €5.5 million in guarantee fees, relating to a €300 million facility extended to the utility by the Ireland Strategic Investment Fund (ISIF).

The terms of the loan issued by the ISIF, which succeeded the National Pension Reserve Fund, required the minister to issue a guarantee for the debt.

The State then charges Irish Water a fee of 2 per cent a year on the amount of the loan that is drawn down.

This payment will cease once the loan is repaid.

Restructuring

The accounts show that the State received €45.6 billion in tax revenues last year, up from €41.3 billion.

Non-tax revenue rose by 16 per cent to €3.5 billion. Current expenditure fell by €632 million to €49.1 billion.

On the capital side, receipts amounted to €9.5 billion last year, up from €5.5 billion. Receipts from the European Union declined to €66.2 million from €115.1 million in 2014.

Capital payments rose to €9.6 billion from €8.8 billion a year earlier. This resulted in a skinny exchequer deficit of €63.7 million last year compared with €8.2 billion in 2014. Among the tax revenues, corporation tax rose by 49 per cent to €6.9 billion but local property tax declined to just under €470 million, from €491 million in 2014.

Surplus

The guarantee fees paid by our domestic banks more than halved to €75.8 million, from €178.7 million a year earlier. This is the result of the guarantee having been ended by the Government in 2013 and the liabilities maturing over time.

The National Lottery generated an increased surplus of €193.4 million, up from €178 million in 2014.

Income from the Central Bank of Ireland rose by 40 per cent to €1.7 billion and dividends collected from various State entities increased by €76 million to €551 million. The sale of the State's holding in Aer Lingus to IAG generated €335.3 million, while the exchequer received €508 million in payments from Permanent TSB connected with the flotation of the bank's shares and a restructuring of its capital.

Among other items, the cost of the Office of the President fell by 2.4 per cent to €3.1 million, while spending on the Department of the Taoiseach rose by 7 per cent to €21.3 million.

Expenditure on Army pensions rose by just more than €2 million to €222 million. The cost of pensions connected to former presidents, ministers, other political office holders, attorneys general and members of the judiciary rose by €970,000 to €14.1 million.