End September 2007 - Exchequer Statement

01.10.07

END-SEPTEMBER 2007 EXCHEQUER RETURNS

PRESS STATEMENT

The following statement was issued today (Tuesday, 2nd October, 2007) by the Tánaiste and Minister for Finance, Mr. Brian Cowen, T.D.

An Exchequer deficit of €3,100 million was recorded in the first nine months of 2007. This compares to an Exchequer deficit of €136 million in the first nine months of 2006 and a budgeted deficit of €546 million for 2007 as a whole.

The Current Account Balance at end-September showed a surplus of €1,530 million compared to a surplus of €2,335 million in the same period last year and a budgeted surplus of €8,050 million for 2007 as a whole.

The Capital Account Balance at end-September showed a deficit of €4,630 million compared to a deficit of €2,471 million in the same period last year and a budgeted deficit of €8,597 million for 2007 as a whole.

Commenting on the results, the Tánaiste and Minister for Finance, Mr. Brian Cowen, T.D., said:

“Income tax and corporation tax are performing well and when taken together with VAT and excise duty, the four main taxes, which were forecast to account for around 85 per cent of total taxes this year, are exactly on target.

This points to a healthy economy as was portrayed by the recent strong CSO data for the first half of the year, which showed that GDP increased by 6.7 per cent and employment rose by 3.9 per cent.

Current expenditure is very much in line with expectations and strong growth in capital expenditure largely reflects the progress being made under the National Development Plan.

However it is now expected that there will be some shortfall in overall tax revenues reflecting developments in some taxes such as stamp duty. While this will be somewhat compensated for by positive developments on other elements of the Exchequer account, an Exchequer deficit of up to €1 billion now seems likely.

The Exchequer Returns for the first nine months of the year underline the need to continue to implement prudent, sensible fiscal policies while at the same time giving spending priority to those areas which enhance our productive potential.”

Revenue

Total current receipts in the first nine months of 2007 amounted to €31,898 million compared to €30,098 million in the same period in 2006.

Tax revenue, at €31,462 million was €490 million below profile at end-September. Year-on-year, tax receipts were up 6.1 per cent. The best performers were corporation tax (+€296 million ahead of profile) and income tax (+€56 million). Capital gains tax, VAT, excise duty and stamp duty were all behind target, at -€107 million, -€132 million, -€225 million and -€401 million respectively.

Non-tax revenue in the first nine months of 2007 was €436 million. This compares to €439 million in the same period last year.

Capital receipts in the first nine months of 2007 amounted to €909 million compared with €1,479 million in the same period last year. They were broadly in line with expectations.

Expenditure

Total net voted spending was €31,962 million at end-September compared to €27,082 million in the same period last year, an increase of 18 per cent. This was €274 million or 0.9 per cent ahead of the published profile and compares to the planned increase of 14.2 per cent for the year as a whole provided for in the Revised Estimates.

Net voted current spending in the first nine months of 2007 was €27,647 million compared to €24,233 million in 2006, an increase of 14.1 per cent. This was €54 million or 0.2 per cent below profile and compares to an estimated increase of 13.3 per cent for the year as a whole provided for in the Revised Estimates.

Net voted capital spending in the first nine months of 2007 amounted to €4,315 million compared to €2,848 million in 2006, an increase of 51.5 per cent. This was €328 million or 8.2 per cent ahead of profile and compares to the planned increase of 19.1 per cent for the year as a whole provided for in the Revised Estimates. Issues for net voted capital expenditure to end-September 2007 illustrate that rollout of the Government’s capital programme under the National Development Plan 2007-2013 including the funding of significant projects in the key areas of transport, housing, the environment and education continues to proceed strongly.

Non-voted capital expenditure to end-September 2007 totalled €1,223 million compared to €1,102 million in the same period in 2006. It includes €1,212 million paid to the National Pensions Reserve Fund.

Expenditure on Central Fund Services totalled €2,722 million in the first nine months of 2007 compared with €3,529 million in the same period last year. It was broadly in line with expectations.