The following statement was issued today (Thursday, 2 July, 2009) by the Minister for Finance, Mr. Brian Lenihan, T.D.

An Exchequer deficit of €14,709 million was recorded in the six months to end-June 2009 compared to a deficit of €5,648 million in the same period last year. Tax revenue was €188 million or 1.2% below expectations for the period and was down by 17.3% year-on-year. Total net voted expenditure was €530 million or 2.3% less than planned for and 0.9% above expenditure levels for the same period last year.

Commenting on the end-June Exchequer Returns, the Minister for Finance, Mr Brian Lenihan, TD said:

“The end-June Exchequer Returns released today are close to my Department’s estimates for this point of the year. The rate of decline in overall tax revenue has eased. The decision in the October Budget to change payment dates for Corporation Tax has had an impact on these figures. Reflecting the weaker economic conditions, Income Tax and VAT are a little behind expectations at this stage of the year. There are still substantial targets in the months ahead so tax revenues will need to be carefully monitored as the year progresses. Nonetheless, overall tax revenues are close to our mid-year target.

In terms of expenditure, net voted spending on an overall basis is lower than we had anticipated for the mid-year position. The annual expenditure targets that the Government set out in the 2009 Revised Estimates Volume remain valid.

The figures show that the difficult but necessary decisions taken in the recent April Supplementary Budget are taking effect. Stabilising the public finances is a critical part of the renewal of our economy. We must pursue this course of action resolutely to allow all in society to benefit from the upturn in the global economy when it occurs.”

Notes for Editors

The overall position is an Exchequer deficit of €14,709 million at end-June, compared to a deficit of €5,648 million in the same period last year. The deterioration of just over €9 billion is primarily due to a payment of €3 billion to the NPRF as part of the bank recapitalisation programme (to end-June 2008 €845 million had been paid to the NPRF), a payment of €3 billion to Anglo Irish Bank which occurred in June, and a year-on-year decrease in taxes of the order of €3.3 billion or 17.3%.

Revenue

Total current receipts in the six months to end June 2009 amounted to €16,310 million compared to €19,525 million in the same period last year.

Tax revenue, at €15,809 million was €188 million or 1.2% below profile for the period and was down year-on-year by 17.3%. Last October’s Budget changed the arrangements for the payment of preliminary Corporation Tax. The effect of this is that a large number of companies are now making a payment in June. This improves the overall tax position on a year-on-year basis. In order to get a sense of the underlying position, excluding the additional Corporation Tax payment made this June would leave taxes around 20% below the first six months of last year.

Further details in relation to tax revenue are available in the attached tables.

Non-tax revenue amounted to €501 million in the first six months of 2009. This compares to €398 million over the same period last year.

Capital receipts amounted to €1,407 million in the period to end-June 2009. This compares

to €1,322 million over the same period last year.

Expenditure

Total net voted spending was €22,911 million to end-June compared to €22,702 million in the same period in 2008. This was €530 million or 2.3% below profile and was 0.9% above expenditure levels for the same period last year. Further details are available in the attached tables.

Net voted current spending was €20,031 million to end-June 2009, compared to €19,523 million in the same period in 2008. This was €232 million or 1.1% below profile. The year-on-year increase was 2.6%.

Net voted capital spending amounted to €2,880 million to end-June 2009 compared to €3,180 million in the same period of 2008. This was €298 million or 9.4% below what was profiled for the first six months of this year and also 9.4% below year-on-year.

Non-voted current (Central Fund) expenditure totalled €3,493 million in the period to end June 2009. This compares with €2,947 million in the same period in 2008.

Non-voted capital expenditure totalled €6,023 million in the first six months of 2009. This compares to €845 million in the same period in 2008. The increase over last year is due to the transfer of €3 billion to the NPRF as part of the bank recapitalisation programme (at this point last year €845 million had been transferred) and the payment of €3 billion to Anglo Irish Bank.

ENDS

2 July 2009