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Finance Minister Paschal Donohoe Julien Behal via RollingNews.ie

Public finances continue to improve as deficit narrows to €4.9 billion

Finance Minister Paschal Donohoe said the strong tax returns show the “strength of our economic recovery”.

PUBLIC FINANCES ARE continuing to improve, with the deficit to the exchequer narrowing to €4.9 billion at the end of November.

That compares with a 12-month rolling deficit that stood at €7.4 billion at the end of October.

The reopening of society, higher employment and VAT returns, and a strong corporate tax take have been credited for the reduction.

Total tax revenues last month were €11.3 billion, which Finance Minister Paschal Donohoe said was a sign of the “strength of our economic recovery”.

He added: “VAT receipts, in particular, reflect the significant rebound in consumer spending, while the income tax performance reflects the ongoing recovery in the labour market.

“Indeed, figures published last week show that the level of employment is now back at pre-pandemic levels, though this varies across sectors.

“Corporation tax receipts in November were very strong, reflective of a very robust performance of many higher-technology sectors during the pandemic.”

Corporate tax revenue amounted to over €4 billion in November, an increase of 31% on the same period last year.

The VAT take was €2.6 billion, almost 25% higher than the same period in 2020.

Despite the positive performance, Donohoe cautioned that there were many fiscal challenges ahead, “including the challenges now posed by the Omicron variant”.

“This is why, once the pandemic has passed, we must realign public revenue and expenditure while continuing to invest in public services, particularly in capital infrastructure,” he added.

Government spending to the end of November amounted to €74.7 billion, €1.2 billion or 1.7% ahead on the same period in 2020.

Labour spokesperson on finance Ged Nash has welcomed the November Exchequer returns, however, he claimed that there was an issue about forecasting being so far off the mark and that it mitigated against proper planning and resource use. 

“It is obviously a welcome development to see the public finances running ahead of forecast to this extent,” Nash said. 

“Nonetheless, the position is far from satisfactory. Forecast divergence of this magnitude makes it difficult to plan the provision of public services, particularly on a multi-annual basis. This is not a sustainable position and it needs to be explained,” he said. 

“I don’t underestimate the challenges involved in forecasting against the backdrop of the pace of change in the public finances over the last decade, compounded recently by the massive disruption caused by the pandemic,” he added. 

“I am conscious too that while forecasting is primarily the preserve of the Department of Finance, both the Departments of Public Expenditure and Reform and the Fiscal Advisory Council also have contributory roles,” Nash said. 

“A constructive discussion of the issues, methodologies and challenges involved at the relevant Oireachtas Committee with contributions from both Ministers and their relevant officials would be useful at this stage.”

With reporting by Hayley Halpin

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    Mute Shelly Levine
    Favourite Shelly Levine
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    Dec 2nd 2021, 7:05 PM

    Eh yeah right Pascal. You’re the master of leprechaun numbers. Irish people’s grandchildren are burden with debt, vultures paying no tax and you and your ilk are sitting on fat pensions, jobs on various boards etc. Maybe have a talk with VDP or Threshold?

    322
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    Mute Daniel Roche
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    Dec 3rd 2021, 12:15 AM

    @Shelly Levine: maybe you should get elected and do better.

    25
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    Mute Gerrard
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    Dec 2nd 2021, 7:00 PM

    They are taking it in on the petrol and diesel like crazy robbing bast&ard€

    269
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    Mute Declan Gowran
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    Dec 2nd 2021, 7:03 PM

    @Gerrard: The new cigarettes as vapping more popular

    34
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    Mute Mickety Dee
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    Dec 2nd 2021, 7:03 PM

    @Gerrard: Who, the Saudis?

    23
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    Mute Gerrard
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    Dec 2nd 2021, 7:12 PM

    @Mickety Dee: 65% of price of fuel goes to the government so that’s €1.12 multiplied by 6 billion litres sold yearly you do the maths

    77
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    Mute Dave Byrne
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    Dec 2nd 2021, 8:46 PM

    @Gerrard: Pack of smokes over €12.50 in is tax.

    13
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    Mute Chris Mc
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    Dec 3rd 2021, 11:08 AM

    @Gerrard: its amazing how much petrol and diesel those corporations are use these days. For them to pay billions of euros in tax

    1
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    Mute Brian D'Arcy
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    Dec 2nd 2021, 7:27 PM

    No mention of the 3.2 billion underspend in the headline and we wonder why this country is falling apart. Of cpurse you save money when you don’t spend it, Voodoo economics 101

    90
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    Mute TomTraubert
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    Dec 2nd 2021, 9:32 PM

    @Brian D’Arcy: the country isn’t falling apart fgs. If you don’t like it, buy a one-way ticket somewhere and give us all a break. Make sure you have a pcr test done as well, just to make sure you can get the hell out of this kip. A pcr, not an antigen. And yes, pay for it yourself.

    45
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    Mute Daniel Roche
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    Dec 3rd 2021, 12:17 AM

    @Brian D’Arcy: how is this country falling apart,I might not be educated but happy to learn.

    12
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    Mute Brian D'Arcy
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    Dec 3rd 2021, 10:23 AM

    @Brian D’Arcy: Apologies, 2.7 billion underspend. Housing crisis and public health crisis, the glue that holds the fabric of society together. Sorry that these issues are an inconvenience to your establishment paradise

    5
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    Mute Chris Mc
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    Dec 3rd 2021, 11:11 AM

    @Brian D’Arcy: yes money not spent on capital investment while we were in lockdown. This is a good news story so give it a rest.

    1
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    Mute Clubhouse Barman.
    Favourite Clubhouse Barman.
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    Dec 2nd 2021, 7:42 PM

    Heading for another property bubble. House prices will be similar to 2005/6/7 next year. Rent is already 30% higher than Celtic Tiger levels. Vulture/Pension funds buying 25% of the available property. Love to know how much of that tax take is from construction!

    66
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    Mute Trevor Wallace
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    Dec 2nd 2021, 7:53 PM

    @Clubhouse Barman.: Bubble bubble toil and trouble!!!

    22
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    Mute Peter McGlynn
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    Dec 2nd 2021, 8:02 PM

    €249bn in debt – doubled under Fine Gael- Fianna Fáil stewardship. Abandoned the Swedish model of bailout they’d modelled it on… in favour of sell offs before property prices recovered.

    60
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    Mute Paul Hedderman
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    Dec 2nd 2021, 8:59 PM

    @Peter McGlynn: Scary how much its increased, and not solely because of the bailout.

    https://countryeconomy.com/national-debt/ireland

    13
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    Mute Daniel Roche
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    Dec 3rd 2021, 12:21 AM

    @Peter McGlynn: outside of the banking disaster,we over borrowed the last two years like every country.

    6
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    Mute Will Roche
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    Dec 2nd 2021, 7:25 PM

    Maybe throw us a few free antigen tests then ffs.

    50
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    Mute Tommy Roche
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    Dec 2nd 2021, 8:24 PM

    @Will Roche: Just pay the €3.99 and stop expecting the rest of us to subsidise you.

    71
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    Mute JedBartlett
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    Dec 2nd 2021, 8:35 PM

    @Tommy Roche: You don’t want to subsidise him but, judging from the comments you’ve been making around these parts for a while now, you want him to protect you.

    The irony.

    31
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    Mute TomTraubert
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    Dec 2nd 2021, 9:37 PM

    @JedBartlett: not irony by any stretch of the imagination, well, except for yours maybe.

    7
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    Mute Hugh Morris
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    Dec 2nd 2021, 10:01 PM

    @TomTraubert: it’s like rain on your wedding day

    4
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    Mute Daniel Roche
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    Dec 3rd 2021, 12:18 AM

    @Tommy Roche: 2.99 in dunnes.

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    Mute Alan Campbell
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    Dec 2nd 2021, 9:32 PM

    At the moment, the finances are improving but wait until the Shinners take over …

    38
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    Mute Chris Mc
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    Dec 3rd 2021, 11:13 AM

    @Alan Campbell: its ok because with SF everyone gets everything they want and someone else pays for it. What’s not to like about that.

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    Mute Splat
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    Dec 2nd 2021, 7:44 PM

    He really is a master class. Fantastic minister for finance.

    35
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    Mute John Johnes
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    Dec 2nd 2021, 8:00 PM

    @Splat: fairytale class

    43
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    Mute Mick Andrews
    Favourite Mick Andrews
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    Dec 2nd 2021, 7:20 PM

    Good on ya Paschal, we know you do it for you and
    Your Country .

    31
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