Tax slump will hit 'Bertie Bowl'
Stadium and road projects threatened by £1.3bn drop in McCreevy's spending money. FINANCE Minister Charlie McCreevy has had to slash by more than half his target for tax revenue this year.
Stadium and road projects threatened by £1.3bn drop in McCreevy's spending money
FINANCE Minister Charlie McCreevy has had to slash by more than half his target for tax revenue this year.
Official figures to be released within the next 48 hours will put the tax take at least £1.3bn below his prediction of £2.5bn.
Mr McCreevy's last Budget was built on the basis that all taxes combined would give him 12.5pc more income than in 2,000.
Now he is looking at a rise nearer to 5pc and has to pick up the tab for extra costs such as the foot-and-mouth scare.
Projects expected to feel the pinch include:
* Campus Ireland the so-called Bertie Bowl will be delayed, except for the aquadrome which is needed for the 2,003 Special Olympics.
* New roads some of the more elaborate road schemes in the £40bn National Plan will be put on hold.
* The much-vaunted health strategy it will be focussed more on value and management rather than the availability of more money.
Exchequer Returns for the first nine months - due out tomorrow - will underline the dramatically changed economic situation.
And at this stage they will barely reflect economic problems caused by the hijack atrocities in America. That has taken a severe toll on the tourist industry and the spin-off problems will be with us for some time.
The biggest fall-off in Budget tax predictions been in excise duties, some 15pc down on target largely because of the dramatic slump in new car sales. So far this year, there has been some 70,000 fewer sales than in 2,000. VAT is also well below expectations.
Income tax has held steady but there will be fall below target in the final quarter because of the loss of so many high tech jobs, especially in the computer and telephone businesses.
There is a continuing rise in the number of houses sold and their prices have contributed to stamp duty being well up on expectations. Despite the shortfall under several headings, Mr McCreevy will still have have a surplus when he pays for the day-to-day running of the country and for investment in elements of the National Plan.
But it will be in the range of £700m to £900m rather than the billions of each of the last four years. To concentrate the minds of his ministerial colleagues on the changed nature of the economy, the Finance Minister is doing his own draft of spending estimates for next year. Ministers will have to argue against his figures rather than bat for their own so-called wish lists.
Within the Department of Finance it was accepted even before the September 11 hijacks that tax revenue for the year as a whole was going to be much weaker than expected.
The situation has got even worse in the last two weeks and the shake-out in jobs will have a twin impact: less income tax and more social benefit payouts. While the tax take has been slowing, the day-to-day costs have been rising. By year's end it is likely to be close on one-quarter higher than for 2,000.
In extra spending, Mr McCreevy has had to pick up the tab for the foot and mouth disease scare, which had a direct cost of more than £100m.
Precautions are still be taken at ports and airports because outbreaks continue in Britain.