The Department of Finance (DoF) has just released the latest Exchequer Returns data, covering the Irish government’s fiscal performance to the end of September.

Tax revenues came in at €26.1bn, up 8.4% yoy and 1.5% (€385m) ahead of expectations. While the outperformance is welcome, we note that the magnitude of the revenue ‘beat’ has slowed from the 3.1% achieved in the first half of the year. The main areas of outperformance on the taxation side were corporation tax (€251m ahead of expectations, due in part to timing issues) and income tax (€101m ahead of expectations). Last month the State’s coffers were swelled by the receipt of the annual pension and health levies, which pushed stamp duty receipts to €846m versus €66m in the previous month.

On the spending side, while 12 of the 16 main voted expenditure headings were within budget, total voted spending was €338m (1.0%) more than forecast, with social protection (€434m over budget) and health (€255m over budget) the main culprits. However, the underlying expenditure position, after adjusting for the €245m shortfall in PRSI receipts), was €93m above expectations. In all, with the positive year-to-date surprise on the reported tax revenue side largely offset by the negative year-to-date overshoot on the headline voted expenditure side, Ireland’s public finances remain poised to meet their full-year targets. However, any indiscipline on the spending front will need to be addressed by the government if it is to meet its target for the expenditure component (€2.25bn) of the planned €3.5bn in fiscal consolidation measures planned for Budget 2013.

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