Analysis: The only way spending can be brought within the Minister's Budget Day targets is to put a freeze on it for the rest of the year, writes Una McCaffrey.
One economist described yesterday's Exchequer returns for October as "the same story, just rolled on a month", and it is hard to disagree.
The prospects for the year continue to look glum, with the same two culprits - tax revenue and public spending - causing most concern among commentators.
Both remain well off targets set on Budget Day last year. Those goals saw Government spending growing by about 14 per cent in 2002.
At the end of October, the actual growth was just slightly less than 20 per cent.
Tax revenue meanwhile - the money that pays for the spending - is shown in the latest data to have risen by 2.3 per cent in the year to date, compared to a full-year target of 8.6 per cent.
It is a story that has been repeated all year, with the Minister for Finance finally recognising last month that something had to give in his forecasts.
On that occasion, the publication of September's Exchequer returns, Mr McCreevy said he expected the public finances to register a deficit of €750 million for the whole year, compared to his previous projections of a small surplus.
He predicted that the annual tax take would come in €1.3 billion below his initial expectations, but insisted that spending would be brought within target before the end of December. One month on, and even those more modest projections have begun to appear excessively optimistic.
Mr Austin Hughes, chief economist with IIB Bank, said yesterday that a deficit of €1.2 billion was starting to look more realistic, as the inflow of tax revenue continues to lack momentum and spending remains high.
In practical terms, the only way that spending can now be brought within the Minister's Budget Day targets is to put a freeze on spending for the remainder of the year.
This would see some spending simply being pushed out into the early months of 2003.
Such a strategy does not come with the recommendation of many economists, with most preferring to see a controlled slowdown.
"The concern to my mind is that there's no trend easing," said Mr Hughes last night.
"We're not seeing any sort of controlled slowdown that would tell us we're on a better footing."
As for taxation, despite some positive developments on the VAT front, it would seem difficult to achieve much improvement in the two months that stand between here and the end of this year.
Bank of Ireland chief economist Dr Dan McLaughlin said a tax shortfall of €2 billion would not be surprising.
Whatever the actual performance may be, Mr McCreevy is now facing into a large policy puzzle in the form of December's Budget.
Dr McLaughlin says the Minister's Department has made repeated errors on budgetary forecasts over the past few years, with the current period no exception.
Is there any reason to believe that 2003 will be any different?
On the face of it, the prospects are not good, with this year's budgetary picture arguably a more difficult one to judge than usual.
The Minister must make a guess on how the economy is going to grow in 2003, for example, a calculation rendered almost impossible by continued uncertainty about the global picture, as well as domestic conditions.
And then will come the projections on tax.
Behind this will be changes to the structures upon which the tax system is built. Individualisation has thrown commentators off course, for example, as have the move to a calendar tax year and changes in the rate of corporation tax.
Against such a backdrop, the Economic and Social Research Institute recently recommended that a neutral Budget be adopted this year, in part so that confusion could work its way out of the system.
How impressed the Minister was with this advice is unknown, but one thing is certain: it will not be the last piece of guidance he will receive between now and December 4th.
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