independent

Monday 21 April 2014

We'll do what it takes to exit the Troika's programme, says Noonan

Joan Burton, T.D., Minister for Social Protection and Leo Varadkar, T.D., Minister for Transport, Tourism and Sport at the opening of the Hansfield Station in Dublin 15. Picture credit; Damien Eagers / Irish Independent

'We can't destroy a good story by having a dress rehearsal. There is a budget coming up. We'll tell you all that on Budget Day,' said Minister Michael Noonan.

Few believe it will be a good story but there may be wicked King.

Speaking last week, the Minister for Finance said the budget adjustment will be whatever is necessary to exit the bailout programme but said it will be less than the €3.1 billion recommended by the Troika

'We are running the numbers at present and we haven't arrived at a final number but it will be less than €3.1bn. We have agreed that as a Government,' Mr Noonan told reporters at the Global Irish Economic Forum at Dublin Castle.

'What I regard as necessary is bringing in a Budget which will enable services to continue. Whatever is necessary to exit the programme will be done, and the figure which in our judgment is necessary to exit the programme is the figure we will arrive at.'

Minister for Social Protection Joan Burton also confirmed there would be an 'easement' in the cuts in the big spending areas of health, education and welfare.

She said the fact that the Government was ahead of economic targets 'eases the pressure on social welfare', particularly the fact that 20,000 fewer people were on the live register compared to this time last year, and 33,000 more people were back at work.

The most recent exchequer returns for the first nine months of 2013 showed tax revenues were exactly on target, while spending was running below expectations.

The exchequer deficit at the end of September now stands at €7.1 billion, some €4 billion lower than at the same stage last year.

The figures showed that tax revenues were up 2.9 per cent (or €768 million) on last year.

Income tax, the largest single source of revenue for the exchequer, raised €10.8 billion in the first nine months of the year, although this was still 0.7 per cent or €81 million below target.

VAT receipts for the period totalled €8.4 billion, which represents a shortfall of €165 million (1.9 per cent) against target, reflecting weak retail sales.

Local Property Tax receipts also boosted Government coffers, netting the exchequer €200 million so far this year, which was €80 million or 66.6 per cent ahead of target.

Net voted expenditure was 2.7 per cent below target, at €31.6 billion, at the end of the period, and 4.9 per cent down year-on-year.

However the Central Bank of Ireland has urged the Government to press ahead with €3.1 billion of cuts and tax hikes, warning any scaling back of the planned fiscal adjustment 'runs the risk of starting to unwind the positive effects' of the considerable consolidation effort to date.

In its latest quarterly bulletin, the Central Bank said there was no point in putting in jeopardy the hard-won gains of the past several years for the sake of 'a relatively small short-term fiscal easing'.

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