The state of the country’s finances will be come under close scrutiny today when the Minister for Finance, Mr McCreevy, releases the Exchequer returns for the first half of the year.
The main focus of concern will be on the tax side where income tax revenue has fallen well below Department of Finance projections so far this year. The May figures revealed income tax receipts were 14.75 per cent behind the same period last year while spending continued to run at 22 per cent higher than in 2001.
Unless a major pick up in the tax take is seen today, the Department's estimate of a 1.1 per cent increase in tax revenue for the year will look increasingly unrealistic.
The shortfall in tax receipts has fuelled concerns that the Department underestimated the impact of the tax cuts in Budget 2002 and as a result the tax base has been unable to sustain Government spending.
Hopes of a compensating effect from increased VAT and excise duty receipts now look unlikely with the tourism and agricultural sectors suffering from a poor summer.
To make matters worse, today's figures follow the publication of yesterday's benchmarking report which will cost €1 billion a year in public sector pay; and growing evidence of weakness across a range of sectors in the economy.