The following statement was issued today (Wednesday, 5 January, 2005) by the Minister for Finance, Mr Brian Cowen, TD.

My Department can now confirm that the Exchequer recorded a surplus outturn for 2004 of €33 million. This compares with the original projection in the December 2003 Budget Day of a target deficit of €2,806 million.

The estimated General Government Balance for 2004 is for a surplus of 0.9% of GDP, the same as was indicated on Budget Day, 1 December 2004.

In 2004 tax receipts were €35,581 million. This was an increase of 10.8 per cent compared to the original December 2003 Budget target of 4.0 per cent.

Total net voted spending, at €32,548 million, increased by 5.9 per cent, which is slightly less that the target for the year set out in the 2004 Revised Estimates of 7 per cent.

Commenting on the results, the Minister for Finance said:
“I welcome the fact that the Exchequer returns for 2004 confirm the improvement in the public finances revealed earlier in the year. This improvement was due to tax receipts being well ahead of expectations and spending coming in within target.

I am pleased that our economy performed better than expected, especially in the housing and construction sectors. This better economic performance meant more tax revenues, especially from Capital taxes, Stamp Duty and VAT. The Revenue Special Investigations also added a significant once-off contribution to tax receipts last year.

I also welcome the fact that in 2004 the Government carefully managed spending so that it came within target.

Looking forward for 2005, the international economic prospects are favourable. However, the situation is not without risk, so we need to manage expenditure within the agreed Budget for 2005. We are focusing our additional resources on the key areas of health, education and science and social welfare. The continuation of prudent fiscal and spending policy will nurture further growth in our economy, thereby generating the tax revenues necessary to improve our public services.

Revenue
Total current receipts amounted to €36,383 million compared to receipts of €33,159 million for the same period in 2003, an increase of 10.8 per cent.

Tax Revenue, at €35,581 million was €2,181 million or 6.5 per cent ahead of the Budget 2004 target. This is due to better than anticipated receipts from nearly all tax heads, most particularly Capital Gains Tax and Stamp Duties, and extra once-off monies from Revenue special investigations. Year on year tax receipts were up 10.8 per cent compared to a Budget target increase for the year as a whole of 4.0 per cent. Approximately €695 million of total tax receipts is due to once-off monies from Revenue Special Investigations. This high level of once-off monies has not been factored into the base for next year.

Non-tax revenue at €802 million, was broadly in line with the Budget 2004 forecast of €819 million.

Capital receipts amounted to €1,142 million which was broadly in line with expectations.

Expenditure
Voted Total Expenditure
Overall net voted spending was €32,548 million compared to €30,742 million for the same period last year, an increase of 6 per cent. This was €343 million – or just over 1 per cent - below the Revised Estimates allocation.

Net voted current spending was €27,179 million compared to €25,452 million in 2003 - an increase of 7 per cent compared to an estimated increase of 8 per cent for the year as a whole provided for in the Revised Estimates. Voted current expenditure was €236 million below the REV provision.

Net voted capital spending amounted to €5,368 million for the year, a 1½ per cent increase on last year. This compares to a projected increase of 3 per cent provided in the Revised Estimates Volume and is €107 million below the REV provision.

The 2004 capital spending figure includes €237 million - or 4.3 per cent of the 2004 voted capital allocation - which is being carried over for spending in 2005. The carryover of capital spending - up to a maximum of 10 per cent of a year’s voted capital allocation - is part of the multi-annual capital investment framework announced in Budget 2004 and provided for in the Finance Act 2004.

Non-voted capital expenditure is in line with expectations. It mainly comprises €1,177 million paid to the National Pensions Reserve Fund.

Expenditure on Central Fund Services totalled €3,584 million in 2004 compared with €3,295 million in the same period last year.