€21.5bn in the red without Budget measures
Published 03/12/2011 | 05:00
The country would be in the red to the tune of €21.5bn next year without the planned tax rises and spending cuts to be announced by the Government next week, new official figures show.
The figures shows the scale of the challenge still facing the country even after several years of austerity.
The White Paper on Receipts and Expenditure published last night shows that, while the State expects to take in €39.9bn in taxes and other income, expenditure will amount to €61.4bn in total, leaving a gap of €21.5bn to be reduced by a series of measures to be announced by Ministers Brendan Howlin and Michael Noonan next week.
The Budget next week is expected to include cuts and tax rises amounting to €3.8bn as the Government tries over several years to move towards EU targets on its deficit. While the adjustment required in this year's Budget is smaller than in previous Budgets, the Government now has to meet strict targets set down by the troika -- the EU, the IMF and the ECB.
The Government is running a deficit -- as a percentage of everything the economy produces -- of 10pc for next year, but this is calculated before the Budget measures are announced and enacted.
It highlights how difficult it will be to retain the confidence of international lenders, although the NTMA hopes to borrow again by 2013.
The scale of the debts Ireland is having to cope with is also illustrated in the figures. It shows that the cost of servicing the national debt will rise from €4.9bn to €7.4bn next year, although the cost of politicians' and judges' salaries and pensions will drop slightly from €59m to €53m, under current assumptions. The cost of running the Oireachtas will also drop from €127m to €116m.
Under the heading of capital expenditure, the government has a number of commitments, mainly related to the banking crisis and the effective collapse of large parts of Quinn Insurance. The Government next year will be paying out €5.8bn in these areas.
For example the credit-union sector is to receive €250m, with the Insurance Compensation Fund (set up to deal with Quinn Insurance) will be receiving funding of €396m. So called promissory notes (effectively government IOUs) will amount next year to €3bn.