Gaping hole emerges in Exchequer returns!

[kerrynorth]

Something that was not highlighted in the Dept. of Finance's January exchequer statement is that Income tax returns for the month are running at 12% below departmental expectations. In fact less was taken in Income tax this January as against January 2006. The budget reductions will not kick in until about March so this cannot be the explaination. E1.107billion was taken in this January as against E1.116billion last year and the departmental monthly profiling expected E1.27billion this January.

This massive as yet unexplaned gap in Income tax was more than compensated for by big increases in VAT, Stamp Duties and Corporation Tax therefore masking this gaping hole. However, seeing as the Income tax returns are a bell weather for employment it does point to some potential issues. Now, one month's figures do not neccessarily need raise alarm, but if this trend persists into the first quarter then it may point to employment problems.

If there are employment problems in the private sector then this may as yet not show up in unemployment stats as you can need to be unemployed for upto 9 weeks to claim benefits and many may be non-nationals whom are not entitled to benefits.

I am just pointing out something that needs to be watched in the next couple of months that may point to the economy not being as robust as we are all led to believe!

[rockofcashel]

might that be related to the 12% drop in house building starts in January ?

[Jonathan_Rainey_FG]

Could the changes in tax rate/bands/personal allowances not contribute to this as per last budget??

It's not the only aspect of govt economic policy we need to worry about though is it? With "falling" house prices, stamp duty and vat are bound to be hit in coming months. Could this slow down come to a sudden stop just ahead of polling day?

[rockofcashel]

Could the changes in tax rate/bands/personal allowances not contribute to this as per last budget??

It's not the only aspect of govt economic policy we need to worry about though is it? With "falling" house prices, stamp duty and vat are bound to be hit in coming months. Could this slow down come to a sudden stop just ahead of polling day?

If FG are lucky .. worst case scenario for FG, is winning an election, and having all this fall into your lap late in the year .. you'll be blamed for killing the Celtic Tiger, and will never be elected again

[kerrynorth]

might that be related to the 12% drop in house building starts in January ?

Seeing as the Consturction sector is such a large and unbalanced element to the economy, yes, this would partially explain some of it, maybe 15-20% of the difference, but not the remaining 80-85%!

For illustrative purposes the Income Tax returns for Jan 2005 and Jan 2006 rose from E945million to E1.116billion, yet fell back to E1.107billion this January!

[Rocky]

Could the changes in tax rate/bands/personal allowances not contribute to this as per last budget??

It's not the only aspect of govt economic policy we need to worry about though is it? With "falling" house prices, stamp duty and vat are bound to be hit in coming months. Could this slow down come to a sudden stop just ahead of polling day?

If FG are lucky .. worst case scenario for FG, is winning an election, and having all this fall into your lap late in the year .. you'll be blamed for killing the Celtic Tiger, and will never be elected again

I can see that happening a mile away. FG will get into a government and day later the economy will collapse, we wouldn't have even done anything yet and we'll be blamed. It basically happened to use in the early 80's and knowing our luck it will happen again. And as you said it would probably be the end of us.

[Jonathan_Rainey_FG]

Ur dead right RoC. Lets hope worst case scenario doesn't happen then! Ltes hope FG win 30 more seats and form a rainbow which delivers economic prosperity and social prosperity to all.

[rockofcashel]

Could the changes in tax rate/bands/personal allowances not contribute to this as per last budget??

It's not the only aspect of govt economic policy we need to worry about though is it? With "falling" house prices, stamp duty and vat are bound to be hit in coming months. Could this slow down come to a sudden stop just ahead of polling day?

If FG are lucky .. worst case scenario for FG, is winning an election, and having all this fall into your lap late in the year .. you'll be blamed for killing the Celtic Tiger, and will never be elected again

I can see that happening a mile away. FG will get into a government a day later the economy will collapse and we wouldn't have even done anything yet and we'll be blamed. It basically happened to use in the early 80's and knowing our luck it will happen again. And as you said that would probably be the end of us.

Come on Rocky .. I'll give you a hug

Was that you on Q&A last night by the way ?

[kerrynorth]

Could the changes in tax rate/bands/personal allowances not contribute to this as per last budget??

The answer is no. The budgetary changes do not kick in until around March I think and as I pointed out above the Jan 2005 and 2006 figures rose from E945million to E1.116million.

The most disturbing element is the fact the department themselves were out E160million, or 12-13%, and they are aware of all the timing issues re taxation an would taken this into account in their monthly profiling!

[Rocky]

Could the changes in tax rate/bands/personal allowances not contribute to this as per last budget??

It's not the only aspect of govt economic policy we need to worry about though is it? With "falling" house prices, stamp duty and vat are bound to be hit in coming months. Could this slow down come to a sudden stop just ahead of polling day?

If FG are lucky .. worst case scenario for FG, is winning an election, and having all this fall into your lap late in the year .. you'll be blamed for killing the Celtic Tiger, and will never be elected again

I can see that happening a mile away. FG will get into a government a day later the economy will collapse and we wouldn't have even done anything yet and we'll be blamed. It basically happened to use in the early 80's and knowing our luck it will happen again. And as you said that would probably be the end of us.

Come on Rocky .. I'll give you a hug

Was that you on Q&A last night by the way ?

No, definitly wasn't me.