Telecom blunder forces change in deficit figures
THE Central Statistics Office (CSO) has been forced to revise upwards the deficit figures for 2012 because of changes in the accounting of last year's data.
Despite the change, the revised 2012 deficit figure was still well inside the target of 8.6pc that the Government needed to meet under the bailout programme.
The CSO has revealed that the gap between how much the State spends and what it takes in through taxes and other revenue was €13.5bn in 2012, or 8.2pc of the value of the economy, not the previously recorded 7.6pc.
The change had to be made after it was discovered that the windfall from the €850m auction of new mobile phone licences was incorrectly accounted for in the government finances for 2012.
The first €450m from the licence sale was paid into the Exchequer at the end of last year by telecoms operators; the balance is to be paid in instalments until 2030. For accounting reasons the total is calculated to be "worth" €723m to the State.
The money should only have been booked in the accounts for this year.
That clarification earlier this year meant the official deficit for 2012 was out by €723m.
Correcting the error, by accounting for the proceeds of the mobile phone deals as income for 2013, would be expected to give a boost to this year's numbers.
However, the Department of Finance says it has already accounted for the extra cash in the preparations for this year's Budget.
It has not changed its estimate for the deficit for 2013 to come in at 7.3pc.
The anomaly was discovered and examined by both the CSO, the Department of Finance and ComReg, according to the CSO.
Davy Economist Conall MacCoille said there would be no wider impact from the revision.
"The IMF is not going to turn around and slap us on the wrists for this," he said. "We're still well within the target."
The CSO publishes government financial statistics in both April and in October.
Because audited accounts for many government bodies become available between April and October, the autumn release allows the statistical body to present more final data for 2012 than previously published.
The gross general government debt was €192bn at the end of 2012, or 117.4pc of GDP, up from €169bn at the end of 2011.
Meanwhile, as Finance Minister Michael Noonan puts the final touches to today's Budget, specialist bank Investec has again warned that scaling the adjustment back to €2.5bn is a "risky" move.
The bank outlined three reasons against easing back on austerity, including the "wide gap" between day-to-day revenue and spending, "underwhelming" Exchequer returns and the fact that market confidence could be eroded.
"Time will tell if this gamble pays off," Investec economist Phillip O'Sullivan said.
The bank forecast economic growth this year of 0.7pc and 2.1pc in 2014. This compares with the more conservative estimates from the Department of Finance of 0.2pc this year and 1.8pc next year.