The following statement was issued today by the Minister for Finance, Mr Charlie Mc Creevy, TD.

An Exchequer deficit of €980 million was recorded in 2003. This compares with the Budget 2003 target deficit of €1,869 million. The estimated General Government Balance for 2003 is for a deficit of 0.1% of GDP.

Tax receipts increased by 9.6 per cent compared to a Budget target of 8.0 per cent.

Total net voted spending increased by 6.7 per cent. The outturn of €30,742m was €15m less than the target for the year set out in the 2003 Revised Estimates.

Commenting on the results, the Minister for Finance said
The Exchequer deficit and the General Government Balance have come in at less than expected due to continued firm management on the spending side and larger than anticipated tax revenues. The reduction in the borrowing requirement means a lower servicing burden on the Exchequer for the future. Given, however, the scale of borrowing projected for the next three years of nearly €10 billion in total, there is an obvious need for continued restraint on the expenditure side and for ongoing strict management of spending to ensure value for money from the record sums involved.

The attached statement of receipts into and issues out of the Exchequer shows the detailed position for the period 1 January to 31 December 2003.

Current Budget
Total current receipts were €33,157 million in 2003, an increase of 5.2 per cent on 2002.

Tax revenue in 2003 increased by 9.6 per cent over 2002. Total tax receipts amounted to €32,103 million, €457 million above the Budget 2003 target, mainly due to increased revenue in capital taxes and company taxes, offset by lower than expected revenues in VAT, excise and income taxes.

Non-Tax Revenue totalled €1,054 million, €51 million above the 2003 Budget target. This excess was mainly accounted for by Exchequer receipts from the National Lottery, dividends and Central Bank surplus.

Central Fund Services spending of €3,295 million was €387 million below the 2003 Budget estimate. The majority of this resulted from savings of €203 million on debt service and €175 million on the EU Budget contribution.

Voted current expenditure was €25,452 million, an increase of 9 per cent on 2002. Spending is €126 million higher than the 2003 Revised Estimates but €75 million lower than the estimated outturn for 2003 published on 3 December last. The lower outturn reflects both additional receipts (including health levy receipts) and savings across a range of Departments.

Capital Budget
Total Capital Receipts were €1,288 million, €48 million below the target for the year. European Regional Development Fund (ERDF) receipts were €120 million below expectations. This shortfall is due to timing and these monies should be received in 2004. The shortfall was partly offset by higher FEOGA receipts.

Net voted capital expenditure amounted to €5,290 million or 97.4 per cent of the 2003 Revised Estimates provision. The savings of €141 million arose across nearly all Departments. The level of capital spending in 2003 was about 5 per cent of GNP, nearly double that of the EU average.

Under the capital envelopes system announced in Budget 2004 Departments will have the facility from 2004 onwards to carry forward to the following year annual capital savings of no more than 10 per cent of their annual capital allocation.