The following statement was issued today (Thursday, 2^nd October, 2008) by the Minister for Finance, Mr. Brian Lenihan, T.D.

At end September, an Exchequer deficit of €9,404 million was recorded. Tax revenue was €3,596 million or 11.2 per cent behind profile. Total voted expenditure was €217 million or 0.6 per cent below the published profile.

Commenting on the end-quarter Exchequer results the Minister for Finance, Mr. Brian Lenihan, T.D. noted that:

“The sharp deterioration in economic growth that we have seen reflects the more challenging international conditions as well as the substantial correction in the property market that we are experiencing. This obviously is affecting tax revenues and over the summer months the weakness in receipts has continued at a pace. In particular, the performance of VAT, CGT and Stamp Duty receipts is disappointing and reflects developments in the property market as well as weaker economic activity. As a result of these trends a shortfall of the order of €6½ billion on tax revenue is currently estimated.

In terms of Government spending, the position at end-September shows that overall expenditure is running at 10.1 per cent ahead of the same period for last year. There are a number of spending pressures, mainly in Social Welfare. As a result, an overrun of the order of €600 million on net expenditure is now likely.

The Government is continuing to take action to deal with the challenging economic situation. Difficult decisions will be required to stabilise the public finances. In that context, Budget 2009 will be framed to provide the stability required and to help to ensure that our economy will be well placed to take advantage of more favourable international conditions in the future. Given our low debt ratio, our educated and young workforce and our low tax environment for workers and business, we are better placed than before to deal with the current challenges. Taking decisive action now is necessary to help ensure fiscal sustainability over the medium-term”

End
Detail Material

Revenue

Total current receipts at end-September amounted to €29,081 million compared to receipts of €31,898 million for the same period in 2007.

Tax Revenue, at €28,478 million is €3,596 million, or 11.2 per cent, behind profile at end-September due mainly to the poor performance of VAT, Stamps and Capital Gains Tax.

Non-tax revenue in the nine months to end-September was €603 million. This compares to €436 million for the same period last year.

Capital receipts to end-September amounted to €1,348 million compared with €909 million for the same period last year.

Expenditure

Total net voted spending at €35,181 million at end-September was €217 million or 0.6 per cent below the published profile. Year-on-year growth in the first nine months of 2008 was 10.1 per cent. The Revised Estimates provide for an increase of 10 per cent for 2008 as a whole.

Net voted current spending at end-September at €30,140 million was €8 million below the published profile. Year-on-year growth in the first nine months of 2008 was 9 per cent. The Revised Estimates provided for an increase of 9 per cent for 2008 as a whole.

Net voted capital spending at end-September at €5,041 million, was €210 million or 4 per cent below the published profile. Year-on-year growth in the first nine months of 2008 was 16.8 per cent.

Non-voted capital expenditure at end-September was €1,270 million.

Expenditure on Central Fund Services totalled €3,382 million at end-September compared with €2,724 million in the same period last year.