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TAX REVENUES FOR the year so far are €548 million ahead of target, new figures from the Department of Finance show.
Finance Minister Michael Noonan said that if the current pattern continues through to the second half of the year “the Budget adjustment will be somewhat less than the €2 billion originally planned”.
When once off transactions – specifically the sale of Irish Life and convertible bonds in Bank of Ireland – are excluded, the deficit has improved by €2.3 billion compared to this time last year.
Health in the firing line
The Department of Health continues to be a bugbear for fiscal hawks in Government, with the finger of blame for a €24 million expenditure overrun pointed squarely at Leo Varadkar’s new department.
Spending at Health is €273 million, or 3.9%, over target. However the big-spending Department is being offset by savings in other areas, most conspicuously in the Department of Social Protection, where spending is €121 million, or 1.7%, under target.
Debt servicing
Ireland has spent just over €5 billion in servicing the considerable debt pile accumulated by the State during the downturn, which is a slight decrease on last year’s figures, when debt servicing costs ran €45 million higher.
Interest expenditure, which is the largest component of debt servicing was 6.3% below target, helped by a bond buy back programme introduced by the Government in December of 2013. This has helped to reduce the State’s interest bill, while the NTMA has also enjoyed low rates and costs from bond sales this year.
In a note issued after the returns were published, Davy Stockbrokers said that the Government should “easily beat the 4.8% deficit target for this year, helped by recent upward revisions to GDP”.
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Is the plan to scrap USC at some point or is it here to stay? I thought it was only a temporary measure (until the recession and it’s ripple effects were well and truly over), but I can’t think of any example in the past where a new tax/charge was introduced and then removed at a later date (without being replaced in another form).
All that lovely money coming in, from the irish taxpayer, off to pay a debt that isn’t even ours. We have to take cuts left right and centre, on top of new taxes all to pay off the feckin interest on a loan that we never asked for. Great little country.
Like a remorseful thief they want to give back the stolen money.
How much of the debt “is not ours”. All or part?
None of it is mine, I didn’t get any loans, mortgages, run up credit card bills and stop paying for them. Im on the same wage since before the ‘boom’, only difference now us I get taxes more and come out with a lot less. So yes I am paying back a loan I never got or asked for
taxed*
Plenty of the debt is “ours” though. A large portion of the debt was used to fund the deficits in day-to-day spending in previous budgets. If those loans had not been received, then there would have been massive cuts overnight to government spending.
@ Aaron: And yet have you or your family used government services within the past few years? Because a large part of the debt has come from filling the gap in paying for those services.
Any government services I availed of or avail of is and has been paid for through my taxes and extra taxes
Ryan Ash
We only had/have a gov ‘debt’ problem, even including the bankster bailouts, because (by design) the Euro shared currency system is dysfunctional, where member countries were subject to the ‘bond vigilantes’ extortion in interest rates. Rates that no sovereign currency ever pays in a recessionary period because their Central Banks dictate rates not ‘markets’.
When the large economies of Spain and Italy were threatened by bond vigilantes with extortionate interest rates (when their debt/GDP ratios were perfectly sustainable with sovereign currencies), only then did the ECB step in with their “…we will do whatever it takes…” speech and implied actions. Besides some private stern words to their chums in Finance to stop taking the P* they also de facto threatened to buy up any and all bonds as needed to prevent rates going up beyond 5%. For which they posses the unlimited resources of the Euro currency issuer. Had they not done so, the Euro would certainly have collapsed.
Countries by definition (for developed ones) are always perpetual & going concerns. They never either need, or do, repay gov ‘debt’, merely roll it over. The data for countries like the US, UK, Japan and all ‘developed’ sovereign currency countries demonstrates that their gov ‘debt’ continuously rises in nominal terms, with only small fluctuations.
This is because sovereign currency countries ‘debt’ is not ‘debt’ at all in the household sense. It is in one part a ‘Monetary’ operation used to drive their chosen ‘base’ interest rates to target, and also as a safe and guaranteed ‘deposit’ facility for the Finance sector to ‘park’ large sums of money pending other uses, investments etc.
This is Monetary system economics, about as far from household budgeting as it gets. Even most economists have been taught falsely. A fact which the UK’s central bank recently admitted in papers & even video explainers on Youtube.
The BoE stated “…some (macro) economics texbooks are wrong…”. Well, that was an astonishing understatement. Near all the macro textbooks say precisely the same things about Money and Banking – ie they are near +all+ wrong.
Nor is this trivial. Near all the most vital macro economics principles depend entirely on a correct understanding of Money and Banking.
It is the number one reason why mainstream economics had not a gnat’s cock of a clue the Global Financial crash was about to happen. Because of this false version of money and banking, such things as banks and debt were +excluded+ from their macro economic models, deemed to be ‘irrelevant’ parameters. That worked out well! (not)
It is also produces the same thinking that has ensured the resultant recessions have been far longer, deeper and ongoing than any in known history, including the Great Depression of the 1930s. Way to go!
Pure intellectual bankruptcy on the part of the entire mainstream of economics both in their finance sector and academe.
This drivel has been taught to economists the world over, for over 3 decades. This is why almost no mainstream academic has even begun to address their mess – they all have lucrative careers invested in it.
Naturally, it is of course the Bankers & their fellow elites that designed all this that are also doing everything to perpetuate that nonsense that serves them so well, at our expense & poverty.
@ Aaron: And yet there is still a gap between what the government spends on running the country and what it takes in taxes. And if bank debt servicing costs are removed, that figure is still large. So, collectively, Ireland isn’t funding itself fully yet to meet the level of services it provides its citizens.
@ Mike Hall: For some time now you have posted on this site (and others too probably) about how practically the entire economic system is wrong and you are right. And fair dues to you for your passion in advancing these ideas you believe in on The Journal. However, it is all well and good telling me how I’m wrong for looking at the situation based on how it is currently operating but I’ve yet to see you actually propose ways to bring about the change you advocate to the current system of economic governance that Ireland (and practically the rest of the world) is a part of. Rather than just identifying the problem, what are the actual, concrete solutions to the Irish situation? Not the Irish situation two years or four years or even in September 2008. I mean the Irish situation today. If you were Taoiseach in August 2014, how would you direct your government to go about ushering in this new economic policy direction for the country? Should Ireland just go it alone completely and work outside the system presently used in the rest of the world?
Ryan
I’ve mentioned above and many times here about the (strictly voluntary) Job Guarantee program to both stimulate the economy & provide relief to many of the jobless, esp the young.
I agree, being already in a dysfunctional shared currency system presents difficulties – but the Gov could still push against the neo liberal Austerity mantra a lot harder & simply insist on increasing our spending until employment & GDP recover. That will mean a (very) short term increase in debt to GDP ratio, but as the growth catches up with that investment, it will stabilise, and likely even reduce. (There is no prospect whatever of our debt reducing in a decade or more with present policies.)
The Euro authorities cannot afford for anyone to leave the Euro at present – as we are seeing in Portugal, the Euro banking system still has many insolvent banks.
We could simply take a lot more ‘fiscal space’ unilaterally, and with great justification. Had we not taken on massive losses, for what is widely accepted was to prevent a Euro wide banking collapse, we would have a considerably lower debt/GDP ratio. And before the bust, we had one of the lowest in the Euro zone.
But we should also be aiming to join with politicians in other suffering countries to forge the necessary reforms to the Euro system. Or if that’s not possible, in due course to get all countries to recover to a point where reversion to our own currencies can be achieved without much drama. With our own fiat currency again, should that be necessary, we would have limitless +financial+ ability to employ all the resources available to be purchased in that currency. (NO!…read that sentence again, carefully until you understand the PRECISE use of terms there!)
Even if we play the game of providing interest bearing ‘deposit’ facilities (‘debt’) to the Euro Finance sector, the correct level of that ‘debt’ is that which enables (near) full use of our productive resources, including employment, whilst keeping inflation low & certainly away from a spiralling up pattern. The ECB, as central bank and issuer of currency must then ensure that interest rates are reasonable (low), properly reflecting the zero ‘risk’ of a currency union that is a going concern.
The alternative is perpetual mass unemployment & likely eventual removal of social welfare and a deeply divided and oppressed society, with all the sh* that entails for ordinary citizens, whilst the top few percent political and ruling classes languish behind their gated communities oblivious and uncaring, living off the labour of the rest of us.
By the way, these aren’t my ideas. I’m advocating the thinking broadly embodied in the ‘Post Keynesian’ school and specifically the Modern Monetary Theory (MMT) school within that. Both of which draw on a very considerable academic history and tradition, all developments and the correct evolution largely of Keynes prodigious work.
A tradition that was largely expunged from the mainstream discourse by 1950s McCarthyism onward, never being allowed back into the discourse of a still massively politicised discipline.
Great that your’e on the same wages Aaron. A lot of people have no wage while the rest of us are down 30%
I might be on the same wage Ciaran but we had a choice of more hours for free and less holidays days or a pay decrease, we took the less holidays and extra hours but yet i’m still coming out with less money than during the boom, we’re all in the same boat, no point in fighting each other, its the governments fault, not ours
Eh good news n all but where exactly is the other 1.5 billion meant to come from? Health? Education? Justice? I’m at a loss here.
I heard the entire County of Mayo is being sold for €50m to some pharmaceutical company. As for the rest of the money? I don’t know, maybe they’ll start a pharmaceutical levy and “levy” the bejaysus out of Mayo.
Well given our age profile (were a young nation) we basically have the highest percentage of GNP spent on healthcare in the world (excluding Mexico and the US).
So since we spend more than anyone else. Maybe health?
€550 million ahead of ‘target’, thus validating the decision last year to reduce the extent of cuts by €400 million, contrary to the Troika’s view and that of Colm McCarthy, John McHale and other ignorant and/or ‘captured’ Irish economists.
Or… exactly the effect that Keynesian principles predict & the IMF research dept. even admitted, even whilst their political leadership ignored it and advocated the opposite.
We can quickly reach (near) full employment and productive capacity if we follow the logic of this and invest in actual stimulus, not cuts at all.
One of the best ways to apply the stimulus would be to a (strictly voluntary) Job Guarantee offering a minimum wage (weekly income) job to any who want it, helping out in the community and charity sector.
This is +macro+ economics, applicable to a whole country’s economy, not the stupid ‘household budget’ nonsense that has produced 6 years and counting of totally unnecessary mass unemployment, falling wages and increasingly exploitative working conditions.
@Mike Hall. How utterly ridiculous and devoid of logic your post is. I suppose that’s why your posting nonsense on the internet and not in a position to decide policy.
Simon Burke
The principle is called ‘fiscal multiplier’ by the IMF in their report a year or two ago (and others) – go look it up, clown. :)
You are the typical debater who loves to throw terms around. Not knowing what they mean but trying to look intelligent by association. An utter fraud to your fingernails.
2 “economists” arguing… Popcorn in the microwave, what could be better?
Until usc is threw out it’s not an easy budget.
Yeah…can I have my usc back and spend it in my city…instead of it being sent to Bill Gates (allegally a listed bondholder) and the rest of them bondholders in the best financial bookie ever invented…PP is nowhere near this scheme..
We know the drill at this stage, the extra revenue will be put aside with the pittance received for selling our kids and grandkids into 40 years of debt slavery, and will be used to buy the next election via giveaways in Budget 2016 to the people most likely to show up at the polling booth.
Or ‘doing a Bertie’ as its otherwise known.
We won’t get a washer… We’ll be told more bullsh!t about how far we’ve come and more hard work must be done but at least we didn’t raise income tax blah blah blah.
They are only trying to save themselves, no doubt that we’ll have ‘good’ budget next year before the elections!
They’re gonna do this property tax cut trick.
Ends “d’ye know what well do, well introduce the PT at a higher rate than we originally intended, then make it look like were cutting it as a result of pressure from the elections..sure we were only listening to the people”
The spin they put on their budgeting is reminiscent of the chocolate rations in 1984
Great news we managed to find a fiver down the back of the sofa just before the moneylender and his finger breaking friends arrive, for the debt that wasn’t ours!
Yippee!
That will cover the over run on the health budget & the TD’s expenses ❗️
They got such a kicking in the local elections that FG are afraid for their right wing Labour partners in Gov getting the jitters at the next budget that they will desert them…All labour worried about for the last 3 years was to legislate for abortion…bring in gay marriage…and build those bloody educate together schools everywhere and just kick the Catholic church around aswell for good measure…marxists the lot of them
And all the better for that finbarr. Let’s hope they get chance to do more to drag this country up to date and away from the unelected man of Rome.
As for the money. Anybody else remember the bovine one waving his little bag with a similar look of glee about ten years ago and with a similar announcement?
And we all know where that went.
It’s amazing – the government keep their mouth shut on Gaza and then go spouting about money as if things have improved somehow …
Mike and Simon must have got new instructions from the bilderburgers !
Fine Gael’s solid management of the growing economy must be sickening reading for the Sinn Fein doomsday depressives trying to convince people we’re all fvcked unless we vote for half-baked Gerry-nomics.
Johngahan?
Do you get paid to mention SF in a negative way in any post where it is possible to do so?
Do you get just a little bit excited when you see your opening?
If so i suggest you stop squatting on mirrors with your pants down listening intently.
It really is not healthy you know.
20+ posts before me from people irrationally griping and moaning about a news story showing significantly increased positive economic activity, classing it as a disaster and that we need a change in government.
And you attack me for criticizing the obvious?
What a fool you are.
John – As the toast falls to the floor the side with the butter still thinks it has won .
Or not…………
But hey – don’t forget about the €900m that those 2 banks that we own brought in. We’re down to about €500m in cuts now. Wahaaaaayyy!
I’m really getting tired of being Irish
Tax take ahead by over 500m, how will the Sin Fein spin doctors here possibly keep the doom and gloom up, do they really believe that there is enough silly folk to keep supporting there the lies?
Well done to the private sector and the various Govt agencies for turning OUR ECONOMY around
oh do shut up with yer sin fein waffle, every god dam story, just leave it out for once,
Big deal your pensions and lump sum payments a covered.
great so irish water will be putting the water allowance back up to 38000 per child.
Too late for me – returned a few years ago, lived almost hand to mouth for the past few years, lost my job a few weeks ago and have decided to leave – herself and the kids are gone already, I leave on Sunday. What an utter shower of unaccountable b*stards.
.
Anyone want to buy a house?
So what seems like a good news story is actually a terrible travesty visited on the Irish people (based on the 1st 14 comments).
I don’t understand.
You’re on the wrong website so. It’s basically a Shinner site mixed in with some extreme right wing racist lunatics. So when there’s any good news at all the Shinners go mad. There’s no votes for them in good news.
Bingo. It’s a Sinn Fein cess pit. They excel at negativity, I’ll give them that.
I’m not going to vote Sinn Fein and the above headline may well be true, but unfortunately there is not one issue that has occurred in the last few years that shown the current government to be anything else but a bunch of self serving prats.
Great news. Good for the country’s reputation abroad too.
Yes it’ll reinforce our reputation as good little Europeans who borrow what we’re told to borrow and keep our mouths shut while we swallow our medicine,
It wasn’t just the banks’ fault. It was a combination of poor regulation, banks that were too eager to lend, an unsustainable economy and people living way beyond their means.
European austerity bitches is how were seen
No, it wasn’t just the banks’ fault, it was also a massive failure in mainstream macro economics thinking, which still persists and is directly why we are still no where near recovery 6 years on and counting…
People were not living beyond their means had we made correct policies to quickly restore the employment and modest incomes needed to grow out of our difficulties caused by the banking pyramid crash in +commercial+, not ‘domestic’ lending.
The latter difficulty ‘domestic’ (household) debt we now face is +only+ and directly the result of economy contracting austerity forced upon us by a dysfunctional shared currency system that our mainstream economists and politicians are too stupid, spineless or both to challenge, even now.
Mike, you are correct. Had the government not increased tax revenue as drastically as they did the economy would be in better shape now.
Time for SSIAs again for the better off? Why would we want to pay our debts and be prudent?
does that mean I dont have to pay property tax, water tax etc & i can keep the tax i pay each week out of my wages as what is left is not enough to live on
That’s left wing politics it’s the most ridiculously unfair plight of mankind,
You’re a right little whinebag so you are mike hall. Ya bloody swine
Monorail monorail
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