Irish Exchequer Returns: Tax revenues were €873m (2.5%) below the original Budget 2011 target of €34.9bn and were a little lower than the outturn as estimated in Budget 2012 in December according to the Department of Finance today. Interest on the public debt was €5.4bn.

The Exchequer deficit in 2011 was €24.9bn compared to a deficit of €18.7bn in 2010 - - a €6.2bn increase in the deficit is due to higher non- capital expenditure resulting primarily from banking related payments.



The Department said that some €261m in corporation tax receipts due for receipt in December were not received into the Exchequer account in time to be accounted for in 2011. The bulk of these receipts have since been received and will form part of the January 2012 tax revenue outturn. When account is taken of this, tax revenues were €612m (1.8%) below profile and are in fact slightly ahead of the outturn as estimated in Budget 2012.

Spending

Total net expenditure in 2011, at €45.7bn, was €724m (1.6%) down year-on-year. Net current spending was €903m (2.2%) whereas net capital expenditure was €1,626m (27.5%) down. Adjusting for the reclassification of health levy receipts to form part of the USC (universal social charge), it is estimated that total net expenditure fell 5.7% in the year (net current expenditure fell 2.6% on that basis). The Government says this is evidence of the careful management of public expenditure which characterised 2011.



Compared to the targets published in conjunction with the July Revised Estimates Volume, total net expenditure was down €440m (1%). Net current expenditure was €377m (0.9%) less than planned with the main underspends on the Agriculture and Social Protection Votes of €166m (16.5%) and €95m (0.7%) respectively. The Agriculture underspend was due primarily to delays in the processing of some payments. The underspend on the Social Protection Vote was due to higher than expected PRSI receipts, which more than offset overspends on a number of schemes, including Jobseekers Allowance.



Net capital expenditure was €63m (1.4%) below target in the year, largely due to shortfalls in the expenditure of the Agriculture, HSE and Environment Votes of €67m, €40m and €35m respectively. Under the long-established capital carryover provisions, €115m will be carried forward to next year. While the capital carryover is technically shown as part of the 2011 Exchequer outturn, it will not be spent in cash terms until 2012.



Debt Servicing

Total debt service expenditure was up €1.1bn year-on-year in 2011, at close to €5.4bn. This reflects the burden of servicing a higher stock of debt.



Overall Exchequer Position

The Exchequer deficit in 2011 was €24.9bn compared to a deficit of €18.7bn in 2010. The €6.2bn increase in the deficit is due to higher non- capital expenditure resulting primarily from banking related payments. The majority of these payments are once-off payments relating to the recapitalisation of the banks and an exchequer deficit of €18.9bn is forecast for 2012.

Excluding banking related payments the Exchequer deficit fell by €2¾bn year-on-year.



EU/IMF Programme Target

As part of the quantitative performance criteria of the Technical Memorandum of Understanding (TMU) of the EU/IMF Programme, a target for the end-December 2011 Exchequer primary balance - - that is the Exchequer balance excluding Exchequer debt interest payments – of –€15.0bn was set.



The Department said that under the terms of the TMU the floor on the Exchequer primary balance is adjusted downward for payments for bank restructuring and credit union resolution funding. There was some €7.6bn in once-off Exchequer payments related to July’s recapitalisation of the banking sector, €¼bn in credit union funding but also €1bn in receipts from the sale of part of the State’s shareholding in Bank of Ireland. Together, these give a “Net Bank/Credit Union Support Adjuster” of –€6.8bn.

Under the terms of the TMU also, the Exchequer primary balance is further adjusted in the event of any over/under-performance in Exchequer tax revenues and PRSI receipts compared to the TMU estimate. Exchequer tax revenues and PRSI receipts amounted to a combined €41.9bn in 2011, which was a €½bn less than the TMU target. This is the “Revenue Adjuster”.



This means that the Exchequer primary balance target was adjusted further to –€22.3bn. The actual Exchequer primary balance in 2011 was -€21.0bn, meaning the target set as part of the EU/IMF Programme was achieved.



End December Exchequer Statement [pdf]

Analysis of End December Tax Receipts [pdf]

Analysis End December Voted Expenditure [pdf]

End December Exchequer Returns - Slide Presentation [pdf]

Check out our new subscription service, Finfacts Premium , at a low annual charge of €25 - - if you are a regular user of Finfacts, 50 euro cent a week is hardly a huge ask to support the service.

It's a simple fact that in the prevailing economic climate, the provision of high quality content cannot be sustained through advertising alone.

Business executives who put a premium on time and value high quality information, should use our service.