Tax take shortfall of €3bn likely, Lenihan tells Dáil

THE EXCHEQUER tax take was expected to be €3 billion short of the January estimate, Minister for Finance Brian Lenihan told the Dáil.

He said that the addendum to the stability programme update, published on January 9th, forecast total tax receipts this year of about €37 billion.

“However, in light of the continuing weakness in the exchequer returns, my department now anticipates that there could be a shortfall of up to €3 billion on this figure.

“This would mean that only €34 billion in tax receipts would be collected in 2009, representing a year-on-year decline of over 16 per cent.’’

Mr Lenihan also revealed that the Government had finalised, over last weekend, its decision to curb recruitment across the public service.

He said the commitments made in the addendum in early January were based on a December analysis which, in light of the economic deterioration and the worsening economic conditions, no longer held sway.

“The science of economics is much like the science of meteorology. One is predicting future weather patterns. The patterns have changed since the addendum for growth was produced. “Even this morning, the disclosure that there was substantial economic decline in the latter part of last year, changes our assessment of a number of positions.’’

Fine Gael finance spokesman Richard Bruton challenged the Minister to say what information had changed which led the Taoiseach to withdraw from the commitment that he was very categorical about in early March – that 9.5 per cent would be the borrowing target.

He added that the Minister should give the House more information so that there could be an intelligent discussion about the options facing the State.

“Will we see what happened on the last occasion, where the Minister came in with budgetary announcements and promptly had to do U-turns on many of them because they had not been subject to proper scrutiny or teased out ?’’

Mr Lenihan said that the Government had sought to engage all parties in the effort to address the difficulties in the public finances.

With this in mind, he had made his department available to the Opposition on an unprecedented scale by arranging for officials to brief the finance representatives on the latest available figures and on the emerging situation.

By convention, said Mr Lenihan, he was not made aware of what had been discussed by Mr Bruton and his department, and he could assure him he had every confidence in the protocols it followed that provided him with all the information it could regarding those matters.

He said that his department could not disclose materials to the Opposition which had been prepared for the Government’s consideration in the assessment of the options open to it.

Mr Bruton said: “Who does the Minister think he is fooling? He knows as well as I do that the so-called deliberative process is excluded from all of the rest of the House.’’ The notion, he said, that the Opposition was being brought in to engage in an intelligent debate was entirely spurious.

“We can go to the department to get proposals costed, as we could in a general election. That is nothing. It does not tell us anything about the state of the economy.

“It does not give us the Minister’s revised forecasts for tax, the economy or spending projections. It does not tell us about the costs of different proposals which have been developed by Mr [Colm] McCarthy and his colleagues.”

Mr Lenihan said he had arranged for Mr Bruton to meet himself and officials so that information, insofar as it could be provided, would be provided.