State debt to hit €22.4bn if we don't bring in €6bn cuts
THE country would be in the red to the tune of €22.4bn next year without the planned €6bn correction in next week's Budget, new official figures show.
The White Paper on Receipts and Expenditure published today shows a sluggish economy producing only an extra €1.5bn in tax revenues next year to €33bn.
At the same time, day-to-day spending would grow by almost 3.5pc to reach €49bn.
The Government's original plans would see capital spending increasing by almost €3bn to more than €10bn in 2011. The general government deficit, as measured under EU rules, would be 12.2pc of output (GDP), little changed from this year's figure.
After Tuesday's fierce Budget, figures in the four-year plan agreed with the IMF/EU will see almost €4bn taken off the deficit -- €2.5bn from the current, day-to-day budget and a further €1.8bn off the capital programme.
This is designed to bring the general deficit to around 9pc of GDP by the end of next year.
Despite the sharp rise in income tax planned in the Budget, the Department of Finance does not expect any increase in tax revenues, as the economy struggles to grow.
The White Paper shows that, before budget changes, income tax is expected to increase by 3.6pc to 11.5bn next year, while VAT will rise by 5pc to €10.7bn.
After this year's strong corporation tax receipts, a further €300m should be raised in 2011, bringing the total to more than €4bn.
Spending estimates show the education budget rising by €300m to €8.4bn next year.
But the national recovery plan calls for savings of €300m on education costs next year.
Social welfare costs would increase by €1bn to reach €14.2bn without any cutbacks.
The Budget is set to take €900m off this cost with a range of cuts to benefits and other entitlements.
Redundancies in the health services are set to save €100m on the €11bn in HSE costs this year, but the Budget will seek to knock €700m off these costs through job losses, redeployment and more efficient purchases.