From Department of Finance; Department of Public Expenditure, NDP Delivery and Reform
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An Exchequer surplus of €1,241 million was recorded to end-January 2021. This compares to a surplus of €1,666 million in the same period last year. The €425 million year-on-year deterioration in the Exchequer balance is primarily driven by falls in VAT.
January VAT receipts reflect the period of level 5 restrictions in November and late-December 2020. Returns of €2,359 million were €343 million, or 12.7 per cent lower than in January 2020. Similarly, excise duties fell €102 million or 20 per cent on the same month last year. January is not a significant month for corporation tax and receipts of €57 million were down by €58 million on the January 2020 outturn. This is after €85 million in receipts were withheld to fund payments under the Covid Restrictions Support Scheme (CRSS). Income tax receipts of €2,283 million were collected in January, up by €85 million or 3.9% on the same month last year, and continue to show resilience to current labour market conditions.
Total gross voted expenditure in January was €6,262 million, €628 million, or 11.1 per cent ahead on the same period last year. Spending by the Department of Employment Affairs and Social Protection was up €809 million year on year, mainly due to the cost of the Pandemic Unemployment Payment (PUP) and Employee Wage Subsidy Scheme (EWSS).
It should be noted that Pandemic Unemployment Payments, amounting to over €500 million, were paid entirely from the Social Insurance Fund (SIF) in January. The SIF is a non-Exchequer fund and therefore does not impact the Exchequer balance. Spending from the SIF does, however, worsen the general government deficit.
Commenting on the figures, the Minister for Finance, Paschal Donohoe T.D. said:
‘Today’s figures show the impact public health restrictions are having on consumer spending. January is usually the largest month for VAT receipts, but, as expected, due to restrictions in November and late-December this month’s figures are significantly down on last year. Tax receipts will again suffer over the coming months as the effects of the current restrictions are felt’
“However, there is light at the end of the tunnel. Case numbers have fallen and the roll-out of the vaccine continues. Income tax receipts have shown again how well many companies have adapted. For those companies that rely on face-to-face interaction, such as the hospitality sector, the Government will continue to provide a wide range of supports for individuals and businesses”.
The Minister for Public Expenditure and Reform, Michael McGrath T.D. said:
‘The increased public expenditure in January shows once again the impact Covid-19 is having on every aspect of life in the country. Compared to January 2020, Gross Voted Current Expenditure for January 2021 is €640 million higher. By far the largest contributor to this increase is in the area of Social Protection which is nearly €1 billion greater than for the same period last year. This is mainly due to the Pandemic Unemployment Payment which cost €509 million in January alone and the Employment Wage Subsidy Scheme which cost €365 million. Nearly 480,000 people are currently in receipt of the PUP with expenditure of over €140 million a week while 46,000 employers are registered for EWSS’.
“Budget 2021 was based on the assumption that no widespread vaccination would be available this year. Thankfully, an extensive programme is now underway with 200,000 doses delivered to date. This will be ramping up significantly in the weeks ahead as community vaccination commences. However this is being implemented against a backdrop of continuing severe restrictions which are having a very significant impact on the normal functioning of the economy. These developments vindicate our Budget strategy of making over €5.4 billion available in funding for a Contingency Reserve and Recovery Fund, which we are deploying to support incomes and fund essential health and education expenditure while preparing the economy for recovery later this year.”
ENDS
Notes to editors: