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Statement on End of September Exchequer Returns

The following statement on the end-September 2011 Exchequer Returns was issued today by the Minister for Finance, Mr. Michael Noonan, and the Minister for Public Expenditure and Reform, Mr. Brendan Howlin.

Commenting on the end-September 2011 Exchequer Returns, Minister Noonan said:

The Exchequer deficit in the period to end-September is over €3 billion lower than it was in the same period last year, excluding the impact of banking related expenditure. This shows that real progress is being made in returning our public finances to a more sustainable position.

The Exchequer Primary Balance target set for end-September as part of the Joint EU/IMF Programme of Financial Support was also met, which is to be welcomed.

Tax receipts in the period to end-September were 8.7% above the same period in 2010 and slightly ahead of expectations. Although the minor surplus is due to some favourable timing factors and receipts from the Pension Levy introduced to fund the Jobs Initiative, it is encouraging that overall tax revenue is growing again. Individual tax-head performance has been mixed. VAT receipts are weaker than expected but income tax is performing well.

Commenting on expenditure in the first nine months of 2011 Minister Howlin stated:

The fact that overall voted expenditure is being managed within the limits set out for the year is to be welcomed. It was over 2% below profile at end-September, reflecting the ongoing tight control of public spending. It is clear that we are now reducing expenditure, increasing our revenues and aligning the two more closely, as we must continue to do over the coming years. Maintaining tight control over expenditure is very important and Departments must manage any emerging pressures from within their existing allocations.

In conclusion the two Ministers added:

Our economy has returned to growth and notwithstanding the impact of banking related expenditure on the budgetary numbers, the public finances are clearly moving in the right direction. We are on track to meet budgetary targets for the year as a whole. We have secured very welcome reductions in the interest rates applying to funding from the Joint EU/IMF Programme which will be of great assistance in helping to return our public finances to health.

Nonetheless, there can be no room for complacency. The deficit in the public finances remains large, despite the recent improvements, and it is crucial that we continue to reduce the gap between our revenues and expenditure in the coming years.