'Our close friendship helped the economy recover,' say ministers
Published 06/01/2016 | 02:30
Ministers Michael Noonan and Brendan Howlin have credited part of the country's economic recovery to their good working and personal relationship.
As they unveiled what Mr Howlin described as "truly remarkable" tax figures for 2015, the two ministers in the Department of Finance and the Department of Public Expenditure and Reform made a political pitch - praising each other for their five years working in partnership.
The State collected €3.3bn more than expected in tax last year, leading to expectations of a balanced Budget in 2017 - a year earlier than predicted.
And the Government isn't ruling out the possibility that the tax take this year could beat expectations again.
Money is now flowing into the State's coffers at a rate not seen since the Celtic Tiger days.
Reflecting on his five years in office, Mr Noonan said: "We've had a very good personal relationship and a very good working relationship and I think the relationship has contributed a lot to the result now after five Budgets."
He said the next objective was to put policy in place for the next five years to "keep the recovery going".
"The growing engine of the economy will allow us to do two things. It will allow us to spend more money on services which clearly is needed.
"But the sequence is you get your economy going first and that gives you the extra resources for additional spending on hiring extra nurses, extra doctors, extra teachers and extra guards," Mr Noonan said. "If the Budget is balanced in 2017, as I expect it to be, then, for the first time, the money we are using now to reduce the deficit will be used for investment."
Mr Howlin said he wanted to echo his Fine Gael colleague's sentiments as some people had claimed they had "set an impossible target to achieve" in 2011.
"Few people, when we embarked on our journey five years ago, even the most optimistic, would have envisaged that we'd be able to announce the figures at the end of 2015 that we did.
"We set out the road. We've had both head-winds and tail-winds. Certainly in the first few years very significant headwinds that delayed our progress on that path we've arrived on now," he said.
The Labour minister said the economic figures were "robust" and not the result of any "windfall or boom-time taxes".
"I want to echo what Michael has said in terms of our personal working relationship which for me personally has been hugely satisfactory. I think we worked well together on a personal basis, but certainly on a professional basis. The advent of two departments, one doing the expenditure side and the reform side, and one doing the macro-economic financing and the taxation has worked extremely well.
"Certainly there was sufficient work in the last five years to keep us both fully occupied," Mr Howlin said.
Exchequer returns for December show that €45.6bn was collected in tax last year, €3.3bn better than expected, and 10.5pc higher than in 2014. Corporation tax has been driving the over-performance, coming in 50pc ahead of target with €6.87bn collected. Almost all tax heads were above target for the year, with the key tax heads of income tax €379m better than forecast at €18.36bn and VAT €170m stronger than initially thought at €11.94bn.
Mr Noonan said the Exchequer was likely to run a cash surplus this year, helped by once-off transactions. Meanwhile, he also said he believed a decision from Europe on Apple's tax arrangements with Ireland would come after the General Election.