New tax figures point to a remarkable turnaround in Ireland’s public finances.

Although the budget deficit climbed to stratospheric levels at the height of the crisis, the latest data suggests the next administration could be in a position to balance the books in 2017, one year earlier than forecast.

Five long years after the last government succumbed to an international bailout, its successor nears the end of its term, with the exchequer in an increasingly positive position.

However, uncertainties remain. The corporate tax surge has raised questions about the sustainability of such revenues. Minister for Finance Michael Noonan has uttered plenty of reassuring words but the fact remains corporate tax still tends to be volatile. Given Ireland’s high national debt, that’s no small concern.

The profitability outlook appears positive, but corporate profitability goes up and down with the economic cycle. No matter what happens in the domestic setting, the prevalence of large global companies in Ireland means the corporate tax revenue stream is exposed to international commerce.

The surge in corporate tax is not the exclusive source of the improvement. But it’s enough to overwhelm everything else.

VAT boost

For example, VAT returns are on the up as consumers increase spending on cars, furniture and white goods. Still, the €341 million overperformance in VAT revenues in the first 11 months of the year must be seen alongside the €312 million corporate tax overperformance in November alone. That this followed an €800 million surge in October shows just how corporate tax has taken off this year.

There is more. With unemployment lower than anticipated, at 8.9 per cent in November, income tax receipts were still below target in the month. The accumulation of €16.56 billion in income tax since the start of the year is €801 million stronger than in 2014 and €51 million ahead of target.

This shows the exchequer is taking the benefit of the return to work. However, the failure to reach the November target even as employment growth accelerates raises questions as to whether job growth is coming from low-paid work outside the income tax net.

Health spending to end-November was €465 million ahead of target. Problems in the health sector are not going to go away before the election, but this data puts the public finances in very positive posture ahead of the campaign.