Exchequer returns leave little space for Budget bonuses

The tax take for the first nine months of the year is €212m behind target

Exchequer returns leave little space for Budget bonuses

Finance Minister Paschal Donohoe at an ECOFIN Council meeting in Luxembourg | Image: © European Union

The latest figures from the Department of Finance have shown that the tax take for the first nine months of the year is €212m behind target.

Despite the shortfall, the Minister for Finance has said the exchequer is on course to meet the government's fiscal targets for this year.

Paschal Donohoe was commenting on new tax and spending figures for the three months to the end of September.

The data shows an exchequer surplus of €2.3bn.

It means a year-on-year improvement of €2.4bn - but the figures are underpinned by the sale of some of the state's AIB shares.

Wriggle room

The exchequer figures mean Minister Donohoe is facing into next week’s budget with less additional funds to play with than the government had hoped.

Commenting on the figures this afternoon, Grant Thornton tax expert Peter Vale warned that: “This time last year, Minister Noonan had almost €500m more to play with in the Budget than forecast.  As it stands today, Minister Donohoe has over €200m less than planned to spend next week.”

Tax cuts

He said the figures do not augur well for any surprise tax cuts when Budget 2018 is announced next Tuesday.

“It looks more likely that very modest tax cuts will be the order of the day, with middle income earners the biggest beneficiaries if the mooted increase in the threshold for entering the higher income tax band is introduced,” he said.

“Overall, it doesn’t look like the Minister has much room for manoeuvre next week, with less in the kitty than expected.”

Capital spending

However the Labour Party’s Finance spokesperson Joan Burton said the government still has room to deliver public services and capital investment, “if it makes the right choices.”

"It would be foolish to squander resources on unnecessary tax cuts at a time when vital needs must be competently addressed,” she said.

“Taoiseach Varadkar and Minister Donohoe should not be tempted to play Santa for electoral popularity.

"People want housing, health and infrastructure properly provided. The Government should not be tempted to bypass these issues for short term electoral gains."

Minister Donohoe’s Budget announcement will be at the earlier than usual time of 1pm next Tuesday.