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Exchequer surplus of €704m recorded in January
Exchequer Returns data released this evening by the Department of Finance (DoF) show that the Exchequer posted a €704m surplus in January 2013, compared to a deficit of €394m in the same month last year. The data are skewed by one-off items and also timing issues, nonetheless there are some important takeaways.
On the revenue side, the headline tax take was +3% y/y, but adjusting for timing issues relating to corporation tax receipts and the Health Insurance Levy (which contributed to a 400% y/y rise in stamp duty receipts) produces an underlying increase in tax revenues of 5.6% y/y. Within the tax headings, we are encouraged by the strong performance of income tax (+10% y/y), which the DoF attributes to “a more benign labour market”. Elsewhere, Excise Duties were +10% y/y and VAT +1% y/y.
Non-tax revenues were €223m versus €345m in January 2012, with most of this decline due to a €73m y/y fall in ELG income (a function of the reduction in the liabilities covered by the scheme).
On the spending side, headline voted (discretionary) expenditure was +4.1% y/y at just under €4bn. Within this current expenditure was +7.2% y/y, but the DoF attributes most of this to “the timing of public service and social welfare paydays”…which is “purely a timing issue and will even out over the course of the year”. Of the 16 expenditure headings, 7 recorded a fall in spending relative to year-earlier levels.
During January the Exchequer received proceeds of €1.06bn from the sale of its Bank of Ireland CoCos, which helped to produce an overall surplus for the month. There were a number of items on the non-voted expenditure side that also helped to flatter the Exchequer’s performance relative to the year-earlier outturn, such as interest payments (€558m in January 2013 vs. €749m in January 2012) and loans to the Insurance Compensation Fund (€154m in January 2013 vs. €210m in January 2012).
Bringing it all together, while we would be loath to read too much into one month’s Exchequer Returns data, there are a number of encouraging signs from this release. In particular, we draw comfort from the 5.6% underlying y/y increase in revenues, while the bulk of the rise in day-to-day spending appears to be down to timing issues as opposed to indiscipline on the expenditure side.
Philip O’Sullivan, Chief Economist, NCB Stockbrokers Limited.
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Exchequer surplus of €704m recorded in January
Exchequer Returns data released this evening by the Department of Finance (DoF) show that the Exchequer posted a €704m surplus in January 2013, compared to a deficit of €394m in the same month last year. The data are skewed by one-off items and also timing issues, nonetheless there are some important takeaways.
On the revenue side, the headline tax take was +3% y/y, but adjusting for timing issues relating to corporation tax receipts and the Health Insurance Levy (which contributed to a 400% y/y rise in stamp duty receipts) produces an underlying increase in tax revenues of 5.6% y/y. Within the tax headings, we are encouraged by the strong performance of income tax (+10% y/y), which the DoF attributes to “a more benign labour market”. Elsewhere, Excise Duties were +10% y/y and VAT +1% y/y.
Non-tax revenues were €223m versus €345m in January 2012, with most of this decline due to a €73m y/y fall in ELG income (a function of the reduction in the liabilities covered by the scheme).
On the spending side, headline voted (discretionary) expenditure was +4.1% y/y at just under €4bn. Within this current expenditure was +7.2% y/y, but the DoF attributes most of this to “the timing of public service and social welfare paydays”…which is “purely a timing issue and will even out over the course of the year”. Of the 16 expenditure headings, 7 recorded a fall in spending relative to year-earlier levels.
During January the Exchequer received proceeds of €1.06bn from the sale of its Bank of Ireland CoCos, which helped to produce an overall surplus for the month. There were a number of items on the non-voted expenditure side that also helped to flatter the Exchequer’s performance relative to the year-earlier outturn, such as interest payments (€558m in January 2013 vs. €749m in January 2012) and loans to the Insurance Compensation Fund (€154m in January 2013 vs. €210m in January 2012).
Bringing it all together, while we would be loath to read too much into one month’s Exchequer Returns data, there are a number of encouraging signs from this release. In particular, we draw comfort from the 5.6% underlying y/y increase in revenues, while the bulk of the rise in day-to-day spending appears to be down to timing issues as opposed to indiscipline on the expenditure side.
Philip O’Sullivan, Chief Economist, NCB Stockbrokers Limited.
Click below to read our current issue...
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