Government deficit and spending growth
Kenny challenges the Government over the shift from surplus to deficit and spending growth outpacing tax revenue. The Tánaiste says the figures match expectations and the Government expects to remain within its limits.
——and arrogance of gross order that on every opportunity the Taoiseach flees from the House and does not come here to do his duty. The Minister for Defence, Deputy O'Dea, can write about it in his column on Sunday if he wishes.
I ask the Tánaiste, as the anointed one in filling in for the Taoiseach, about the figures published yesterday which show that the Government has turned last year's surplus of €900 million into a deficit of €1.4 billion. In the first half of the year the Government increased the rate of current spending at two and a half times the rate of growth in tax revenue. It is clear that if this pattern continues, the figures at the end of the year will be much worse than those forecast by the Government a few months ago. I ask the Tánaiste and Minister for Finance to confirm that the tax cuts his party promised before the general election will not now take place. What is the position on the promise made to the people before the general election about tax cuts?
Comment on this
The commitments made in the programme for Government stand on the basis of the overall macro-economic stance the Government is taking. It is important to point out that yesterday's results are in line with expectations and profile. By the end of the year we hope to come in within the limits we set ourselves, as has been the case in the past. There will not be windfall gains which have been directed at debt reduction in the past, but it is important to point out that even in regard to stamp duty, for example, about which there has been some discussion and speculation, from a very high base last year, the figure is up by 5.5% in the first six months of this year, although we had hoped it would increase by 10%. It is important that we should be careful not to overreact to the current easing from the very high levels of activity seen in the past. The preliminary figures in the CSO first quarter report which was published yesterday also but did not receive widespread publication show that the first quarter growth figure is 7.5%.