August exchequer figures show sharp deterioration

[kerrynorth]

The August exchequer figures show heavy falls in a number of tax heads and overall revenue is running E300million below expectations. Stamp Duty has had the sharpest fall and is circa 10% below expectations. Other tax heads below profile are Customs, Excise Duty, VAT and CGT. All the other tax heads CAT, Income and Corporation Tax are only marginally above profile.

The August figures show a E3.1billion turnaround in the public finances from the same month last year. Last year there was a E200 surplus this time the finances are in a deficit of E2.9billion.

Expenditure on capital and services are running E570million ahead of that budgeted and servicing the National Debt is also costing more than budgeted.

These figures mark a severe deterioration in the public finances.

[odie1kanobe]

Its a 1 month snapshot.

[kerrynorth]

Its a 1 month snapshot.

Wrong. It is a 8 out of 12 months snapshot. The figures quoted are the culmulative returns for the 8 months of the YTD and compared with the same month last year.

Two-thirds of the year is one hell of a representative snapshot!

[kerrynorth]

I see that some of the commentators are now forecasting that revenue will be around E1billion less than Brian Cowen forecast by year end. Plus expenditure growth is running at 19.8pc! And they are talking of just 7pc next year!! There will have to be a lot of pain in the budget and estimates to bring this about.

[factual]

Not to worry too much as Irish government sector debt is very very low.

[returning officer]

The dept of finance used to be wrong by 2-3Bn plus, now it MAY be wrong by 1bn minus.
But don't revenue receipts pick up in the last quarter while expenditure curtails?

[NeilW]

Its a 1 month snapshot.

Wrong. It is a 8 out of 12 months snapshot. The figures quoted are the culmulative returns for the 8 months of the YTD and compared with the same month last year.

Two-thirds of the year is one hell of a representative snapshot!

Yeah but you were starting these threads after one, two and three months as well! And I think the same points that were made about this type of analysis then still stand now.

[returning officer]

I see that some of the commentators are now forecasting that revenue will be around E1billion less than Brian Cowen forecast by year end. Plus expenditure growth is running at 19.8pc! And they are talking of just 7pc next year!! There will have to be a lot of pain in the budget and estimates to bring this about.

How could growth of 7% in expenditure constitute pain?

[kerrynorth]

The dept of finance used to be wrong by 2-3Bn plus, now it MAY be wrong by 1bn minus.
But don't revenue receipts pick up in the last quarter while expenditure curtails?

The Dept. of Finance always present conservative figures in their estimates - understating revenue and overstating spending. Consequently you had a 2-3billion underestimate on the upside. However, what is happening now is totally different as revenue is set to undershoot even the dept.'s conservative estimate by 1billion or more. That is a totally different animal.

[freedomlover]

I see that some of the commentators are now forecasting that revenue will be around E1billion less than Brian Cowen forecast by year end.

Yes, you are correct. The commentators you are referring to are Davy Stockbrokers. Their full analysis is contained here.

http://www.finfacts.com/irelandbusiness ... 1035.shtml

However, you omitted to mention that they also predict that Ireland will still have a budget SURPLUS of 0.5% of GDP in 2007. In comparison, in 2007 the U. Kingdom is predicted to have a budget DEFICIT of 2.7% of GDP, France a DEFICIT of 2.4% of GDP, the U. States a DEFICIT of 1.5% of GDP and Germany a DEFICIT of 1.0% of GDP. If Ireland were to match the U. Kingdom's performance, we would have a budget DEFICIT of 5 billion euros, as opposed to the SURPLUS of over 0.5 billion euros that Davy predict. Who's shoes would you rater be in? Brian Cowen's or Alistair Darling's?