The Exchequer has posted a deficit of €205 million for the first quarter of the year, according to figures released today from the Department of Finance. This compares to a surplus of €608 million for the same period last year.
The figures also show Government spending in March was running nearly 12 per cent higher that the same month last year. However, the Exchequer statement for the third month shows a slowdown in the rate of spending compared with January when spending was 33 per cent ahead of January 2002.
The Government nevertheless remains ahead of its spending target of 6.7 per cent for the year as a whole as provided for in the Revised Estimates.
Overall revenues of €7.055 billion were slightly behind the same figure for March 2002 of €7.189 billion.
Tax revenues were up 11.9 per cent at for the first three months of the year, €6.956 billion, compared to the same period last year. The Department of Finance said overall tax receipts remained broadly on target.
Income tax receipts remained weak, however, with most of the increased tax revenue coming from a surge in VAT returns. The Government increased the VAT rate from 12.5 per cent to 13.5 per cent in the last Budget. Corporation tax revenues also showed a sharp increase and were more than double the total for the same period in 2002.
The income tax trend will be closely watched in the coming months as a poor performance in this area put pressure on Exchequer finances last year. The Minister for Finance Mr McCreevy said today that overall tax receipts are broadly on target.
The Government spending profile for this year projected sharp spending rises in January and February with a sharp slowdown in the later months of the year.
On the spending side, total voted expenditure in the first three months of the year was €6.825 billion compared with €6.102 billion in March 2002. This is €440 million less than the projected spending but the Department said this was due to timing factors.
Mr McCreevy said spending was within the expected profile for the first quarter. "There are some spending pressures but I would strongly reiterate the Government's resolve to ensure that expenditure in 2003 comes in on target."
The Minister added that expenditure control arrangements were in place and these required that the individual departments manage within these limits.
