Irish finances get even worse

The deterioration in our public finances has accelerated sharply according to the latest Exchequer statement from the Department of Finance. According to the figures, there has been a massive shortfall of to €7.9 billion in the the amount of taxes collected by the Government during the first 11 months of the year. This is a far bigger shortfall than was predicted and analysts now expect the tax shortfall for the whole year could well exceed €8 billion. This is an extremely bad set of public finance figures, which point to an Exchequer deficit of about 6.5% for GDP for the year. That is more than twice the European Union borrowing limit. The Government had to borrow €7,360 billion to pay its bills during the first 11 months of the year. That is not far short of €2 billion more than the Department of Finance assumed just two months ago.

This is the equivalent to a tax shortfall for almost €2,000 for every worker in the country and it means that the budgetary arithmetic for 2009 is already under intense pressure before the new year even starts. It is likely to fuel speculation that the Minister for Finance, Brian Lenihan, could be forced to bring in a mini-Budget during 2009 to regain control over the public finances.