The prospect of the Government avoiding a return to borrowing this year has been boosted with the publication of its accounts for 2001.
They show that Government revenues from tax and other sources exceeded expenditure last year by €650 million, some €334 million more than predicted by the Minister for Finance, Mr McCreevy, on Budget day.
The larger than expected surplus means the Minister starts the year in a stronger position than he anticipated, bringing him closer to his objective of completing the year without having to raise money on the international debt markets.
The Minister's room for manoeuvre is slim, as revenue is only expected to exceed expenditure this year by €170 million, and even this will require several once-off measures including dipping into the Central Bank's reserves and funds put aside to meet future social welfare costs.
"The 2001 outcome leaves the public finances in a healthy position and I look forward to a further Exchequer surplus next year," he said yesterday. Mr McCreevy believes the once-off measures are justified to avoid a return to borrowing - after four years of surpluses - until absolutely necessary.
The 2001 Exchequer returns, published yesterday, show that tax revenues in the year were €27.9 billion, some 3.2 per cent ahead of 2000, but well below the ambitious forecast, made by Mr McCreevy in his previous budget, of a 12.5 per cent increase.
The shortfall was yesterday blamed by Department officials on the economic slowdown in the second half of the year.
Spending rose by 22 per cent, to €23.5 billion. When other revenue and expenditure measures are taken into account, the overall Exchequer surplus is €650 million.
The surplus is larger than forecast because several Government departments spent less than expected in December.
The biggest savings were achieved in the Department of Social, Family and Community Affairs, which was some €67.3 million under budget, primarily due to lower than expected numbers claiming social welfare.
The Department of Defence also spent less than expected, saving €37 million through a mixture of administrative and pay savings, as well as delaying a €15.24 million helicopter contract.
Some €24 million that had been allocated to the Department of Enterprise, Trade and Employment for social employment schemes was not used.
Similarly, approximately €19 million allocated to the Department of Justice for childcare measures was not spent.
Department of Finance officials said yesterday that the monies left unspent in 2001 would not automatically be available to the various departments in 2002. There were also further savings due to lower than than expected interest payments on the national debt, and smaller than anticipated payments to the European Union.
The fragile nature of the surplus predicted for this year by Mr McCreevy was underscored yesterday by the release of the final tally for the costs of the foot-and-mouth epidemic.
The state spent €107.23 million combating the disease. Of this, €46.1 million was spent by the Department of Agriculture. The Garda overtime bill for the additional Border patrols and other measures was €39.37 million. A repeat of the crisis or a number of similar unexpected economic shocks could wipe out the surplus Mr McCreevy has forecast.
IBEC, the business lobby group, said last night that far more rigorous control of Government expenditure would be required this year in light of the "climate of significantly slower growth in 2002".
