Surplus recorded in 2018 Exchequer figures for first time since 2006 – Donohoe

3rd January, 2019

End of Q4 2018 shows strong tax performance & spending being managed within expectations 

  • The Exchequer recorded a small surplus of €0.1 billion last year, the first underlying surplus since 2006. This compares to a headline surplus of €1.9 billion in 2017, which included the impact of the proceeds of the AIB share disposal of €3.4bn. Adjusted for this, the underlying Exchequer balance improvement in 2018 is €1.6 billion.
  • Today’s Exchequer Returns show that tax receipts in 2018 are up almost €4.3 billion (8.3 per cent) year-on-year underpinned by a strong economy;
  • Gross voted expenditure is being managed within expectations, and is up 7.7 per cent in the year, reflecting the Government’s continued commitment to investing in our public services and infrastructure to meet our people’s needs 

Speaking about the Exchequer figures today (Thursday) Minister for Finance and Public Expenditure & Reform, Paschal Donohoe T.D., stated: ‘All major tax heads, except excise duties, are up year-on-year, reflecting the growing strength of the economy, while expenditure remains close to Budget day expectations. This means that we are on track to exceed our fiscal targets for 2018, with today’s figures recording a small surplus.’ 

The main budgetary metric for international purposes is the ‘general government balance’ and this will be reported by the CSO at end-March.  However, based upon the Exchequer figures, a small general government surplus is now possible. A modest deficit of 0.1% was projected in the recent Budget. We are now aiming to deliver a surplus of 0.1%. 

Minister Donohoe stated: ‘This strong performance will provide a stable platform for the external challenges that lie ahead in 2019.’ In relation to the significant increase in corporation tax receipts, the Minister remarked: ‘I have requested the Department of Finance to look at potential policy options to mitigate against this well-flagged risk to ensure the sustainability of the public finances. A report on the outcome of this work will issue in the coming period’. 

Finally the Minister remarked: ‘Any gains in 2018 against profile represent a positive development in terms of our potential to reduce our overall debt burden. We must continue to prioritise the reduction of debt, which in the event of a shock to our tax base, would assist our fiscal capacity to deal with such an occurrence, putting us in a stronger position to weather potential storms and ensure our economy remains resilient.’ 

Note to editors:

Powerpoint presentation by DoF officials 
Fiscal Monitor December 2018