Plummeting tax take sees deficit almost €25bn
Ireland's tax take has plummeted to 2003 levels with the country's deficit doubling in the past year, according to Exchequer returns released today,
Finance Minister Brian Lenihan however insisted that the actions taken by the Government to improve the public finances were working.
The Exchequer deficit was €24,641m in 2009, compared to €12,714m at end-December last year.
Expenditure for the year was €47,163m, but tax receipts were €33,043m, down €7.7bn or 19% on a year-on-year basis.
The last time the tax take was at this level was 2003.
Minister Lenihan however said in a statement that the overall deficit position is better than expected in the Budget, with tax revenue €500m better than forecast.
Tax receipts for the month of December were better than expected, Minister Lenihan said.
The Minister said the figures highlight the impact of our rising debt levels, as debt servicing costs have increased by over €1bn in 2009.
"This is clear evidence of the need to take action to achieve long term sustainability of the public finances," he said.
He insisted that the returns demonstrate that action already taken by the Government is working.
"Given the small improvement in the actual deficit over that anticipated in the December Budget we face into this year’s task with a greater sense of confidence," he said.
"The challenges we face are great but the Government is committed to the targets set out in the recent Budget.
"As I said, economic growth will return during the course of this year and this will assist in the ongoing improvement in the public finances.”
Responding to the figures Fine Gael’s deputy leader and finance spokesman Richard Bruton said the Government’s ill-thought out responses did nothing to limit damage to the economy last year.
“It would be very foolish to assume that these figures represent a turning point,” he said.
“As we head into a new decade, it is vital that the Government develops a strategy for economic recovery on a platform of real reforming change – in every dimension of economic activity.”
Labour deputy leader and finance spokeswoman Joan Burton said the figures show Ireland remains in the grip of one of the worst recessions in an industrialised economy since the Second World War.
“Rather than put in place a strategy to boost employment and growth, the Government continues to wait for the international economy to recover,” she said.
The Irish Small and Medium Enterprises Association (ISME) called on the Government to immediately institute a National Enterprise Strategy, which would assist in kick-starting the economic recovery.
“The reported exchequer deficit of almost €25bn shows, beyond doubt, that the economy is on life support and the business sector requires an immediate action plan to get us out of this mess," said ISME Chief Executive Mark Fielding.
“With the first quarter of 2010 promising to be particularly difficult for SMEs, urgent action is required to introduce policies that will have an immediate effect on the enterprise sector," he said.
