Exchequer collects just €3bn in taxes for January
Published 03/02/2010 | 05:00
THE Government borrowed another €800m last month to keep the country running, but that figure is in line with expectations.
Exchequer returns show the Government collected little more than €3bn in taxes last month.
Day-to-day spending was €4.2bn but the Exchequer made a "profit" on its capital programme, with spending down €120m and an €800m payment from the EU agriculture budget.
Many economists still hope that the public finances will finish 2010 slightly better than expected.
However, with any growth unlikely to appear before the summer, there is very little guide to the future in yesterday's returns.
They do show the scale of the collapse in the economy in the first six months of last year.
VAT receipts of €1.6bn were 18pc down on the same month last year. Even after increases in levies, income taxes were 10pc down.
A two-thirds drop in profits tax was partly due to changes in the timing of payments, which made last year's figures a bit better and this year's a bit worse.
Falling stock markets and what has been described as a "dead" property market contributed to a 41pc fall in stamp duty and a 25pc drop in capital gains taxes.
Such figures reflect the disastrous 14pc fall in the economy's output in the first nine months of last year.
But they also give some support to the idea that things stabilised in the final three months of 2009.
"The actual tax-take for last year came in €473m higher than anticipated on Budget Day on December 9," said Alan McQuaid, who is chief economist at Bloxham Stockbrokers.
"That suggests that the overall out-turn for 2010 is likely to be better than forecast too, given that it is starting from a stronger base."
Spending during the month was down a massive 13pc on last year, helped by public sector pay cuts and pension levies. The cost of the national debt was €200 million higher than January last year.
For the year as a whole, the Government expects day-to-day spending to fall just 1.8pc, despite all the Budget pain.
Finance Minister Brian Lenihan plans to borrow €18.8bn this year to meet the gap between expected tax revenues and spending -- €6bn less than last year's figure.
But many analysts think Mr Lenihan was cautious in the Budget forecasts and they reckon he might even beat his €18.8bn target.
"We expect the economy to shrink by half a per cent this year, rather than the 1.3pc fall forecast in the Budget," said Lynsey Clemenger, economist at Ulster Bank.
"We wouldn't be surprised to see the deficit coming in less than €18bn," said Alan McQuaid.
"Of course, that is still totally unacceptable, but at least it is a move in the right direction," he added.