Minister for Public Expenditure Paschal Donohue has warned that Government spending is running nearly 15% ahead of last year- particularly in Education and Health.
He said some of this may change as the year goes on, adding that the Government still has a hefty surplus to invest in two new sovereign wealth funds – €4 billion a year into a new Future Ireland Fund from next year, and €2 billion a year into a new Infrastructure, Climate and Nature fund.
Speaking on RTÉ’s Morning Ireland, Mr Donohoe said overall taxes are up in comparison to a year ago so the amount of tax being collected has increased and Ireland is in the “very fortunate position” that the amount of money being collected is roughly equal to the amount of money being spent.
“I want to keep it that way and I want to deliver what we have done in previous years, is to have a budget surplus so when corporate tax receipts fall, we’re not exposed and we don’t have the difficulty we had a number of years ago when tax receipts we thought would be around forever turned out not to be.”
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Asked how he expects to correct the overspend in health between now and the end of the year when demand is up, Mr Donohoe said more money being available for a number of Government departments has happened many years before, but he said it is very early in the year to be talking about that.
However, he said it would be “very foolhardy to rule it out at this point”.
He said the broad picture is public finances are in surplus, we are not spending money that we fear we might not have in the future and we are in a position to set aside money that will help us deal with the risks of tomorrow.
The latest Exchequer Returns published yesterday showed a surplus of €300m but there was a decline in corporate tax which was offset by growth in other taxes.
In the first quarter of the year, corporation tax receipts of €2.4 billion were €800m, or 24.8%, lower than the same period last year.
The corporate tax take for the first three months of the year is €1.1 billion, or 31.8%, below forecast.
