Shortfall will put austerity plans under spotlight
Nearly everyone has that nightmare where they are running very fast - usually from an unidentified danger - but are getting nowhere. Just a week or so on from the election, the prospective coalition government must know the feeling.
Perhaps the most striking aspect of Wednesday's Exchequer returns on government finances was that income tax and levy revenues last month were 8% higher than in the same month last year - and that does not include the Universal Social Charge (USC). The reductions in tax credits and income tax bands received less publicity than the USC, but are more draconian.
The notorious charge will raise €420m in a full year but the credit and band charges will cost taxpayers over €1bn in a full year. Figures cannot really convey a change on that scale. It took the first pay packet of the year to show people what had happened.
Exchequer returns are complicated by having two sets of comparisons: one measuring them against the previous year, and the other against the Department of Finance's projections for the current year. While income taxes were 8% higher than in 2010, that is slightly less than the forecasts.
That was an early hint of weakness in the economy and it was accompanied by another hint from VAT. The projections for VAT in the first two months were for €50m less than in 2010. It was €200m less.
The returns will be watched month by month for signs as to whether 2011 economic growth can come anywhere near the 1.7% necessary to achieve the budget targets. If everything else stayed the same, the outcome might begin to answer the bigger question - whether the four-year plan has any chance of achieving its objectives, or whether it is inherently self-defeating. If Irish growth comes up short, debate will continue to swirl around the austerity programme and whether the cure is worse than the disease.