Belfast Telegraph

Monday 28 July 2014

Country in the red despite cuts

Finance Minister Michael Noonan says the deficit is coming down but more pain is necessary

Ireland remains nearly 3,700 million euro in the red despite reducing its overall debts, latest figures have shown.

After a number of painful austerity budgets, the Government is now pulling in 8,816 million euro a year in taxes.

But despite the two-pronged onslaught of tax hikes and spending cutbacks, the Fine Gael/Labour coalition still need to find 3,695 million euro to plug a gaping hole between income and outgoings.

Finance Minister Michael Noonan said the deficit was coming down - 568 million euro lower than last year - and was on target with official forecasts but suggested more financial pain was necessary.

He said: "We are making progress but the fact remains that we still have a sizeable deficit in our public finances that we must bridge. We have to reduce our level of spending and increase the amount of revenue we collect in order to close that gap further and bring about renewed public finance sustainability."

Mr Noonan said the Government had again met the targets set out under the terms of the European Union/International Monetary Fund/European Central Bank bailout package.

He said: "The performance of income tax remains strong and when account is taken of once off items, income tax is up nearly 8% on an adjusted basis year on year.

"This strong performance is particularly noteworthy given that there has been no increase in income tax credits, rates or bands over the period and may be reflective of the stabilising labour market evident over recent quarters."

Minister for Public Expenditure and Reform Brendan Howlin said Government departments were meeting their expenditure commitments, but he also warned of the possibility of more belt-tightening.

He said: "It is, however, early in the year and the Government is aware of the continuing need to keep overall expenditure on profile."

Latest News

Latest Sport

Latest Showbiz