Exchequer returns published yesterday, which showed Government tax revenue close to targets set in the budget, are a clear sign the economy is on the up, Minister for Culture, Sport and Tourism Mary Hanafin said today.
The figures to the end of April showed exchequer deficit – the shortfall of tax revenue over spending – was smaller than for the same period last year, the first time this has happened since the crisis in the public finances began.
Ms Hanafin said the State's tax take was ahead of target for April, day to day was now spending under control and that the budgetary deficit was €355m less than last year.
“I would agree with [Minister for Finance] Brian Lenihan when he said the worst is over and the Irish economy is now recovering," she said. "We’re on the up."
The Department of Finance said the exchequer figures were “broadly in line with expectations”. Previous exchequer returns this year have failed to meet Government targets.
Ms Hanafin said suggestions that Ireland may at some point have to follow Greece in seeking aid from the European Union and International Monetary Fund were unfounded and that the Government was confident this would not have to happen.
“There are two very significant differences between Ireland and Greece,” she told RTÉ radio.
“The first is that Ireland is not having any difficulty raising money on the international markets. Our bond spread is very good and there is confidence in those markets and we haven’t had a problem. Greece has and that’s why they have had to turn to Europe for help.
"The second difference is that Europe and the world is recognising that the tough budgetary policy decisions taken by the Government in recent months are having the intended impact on the public finances and they are restoring confidence in Ireland.
"Greece didn't take those decision so there is no way the European community was able to have confidence in them and it was very significant that the European Commission indicated only this week that Ireland's bold and credible measures are paying off."
The positive exchequer returns followed a measure of activity in the key services sector, which showed it had returned to growth in April for the first time in 27 months.
European economics commissioner Olli Rehn said he agreed with Mr Lenihan that the worst was over for the Irish economy.
The commission said the economy would grow by 3 per cent in 2011 after contracting by 0.9 per cent this year – better than the 1.4 per cent contraction it had previously projected.
Tax receipts during the period to April, while down 10.8 per cent on the same period last year, were in line with Government targets while spending by Government departments, at €14.36 billion, was 8.1 per cent below that of the first four months of 2009.
Economic commentators said last night the exchequer figures indicated tax revenues could soon be ahead of target and contributed to optimism that the public finances could be stabilised.
"We know that real economic activity has steadily improved month on month throughout the year," said economist Rossa White of Davys, "so the momentum suggests it won't be long before tax revenue is actually ahead of forecast."