Reforms Urgently Needed to Address Overdependence on Revenue from Property and Consumption - Morgan
Responding to yesterdays Exchequer returns which show a deficit €3,100 million for the first nine months of 2007 Sinn Féin spokesperson on Economic Affairs Arthur Morgan TD said these figures haven fallen far short of government tax revenue projections further proved the need for reforms to address overdependence of the Exchequer on revenue related to property and consumption. The government, Morgan argued, has a responsibility to ensure the state is in a position to properly fund public services going forward.
Deputy Morgan said:
“The exchequer returns published yesterday show that a deficit of €3,100 million was recorded in the first nine months of 2007. This is a matter of some concern as it is much more significant deficit than the €546 million deficit budgeted by government for 2007 in its entirety.
“In the run up to the general election as Sinn Féin steadfastly refused to go down the road of promising tax cuts to gain favour with voters. We were clear that the more income tax is reduced, the more dependent the exchequer becomes on other more insecure sources of tax revenue such property and the more it becomes vulnerable to a sharp contraction in tax receipts. It is clear from the figures published today that this is exactly what is now happening as revenue from VAT and stamp duty in particular are down.
“The high dependence of the Exchequer on taxes related to activity levels in the construction and property sector has made it increasingly difficult to make accurate projections regarding tax receipts. In the past this has meant tax receipts being ahead of projections. The opposite is now the case and this is something which the Minister for Finance will need to address.
“Without being able to make accurate projections in respect of tax receipts it is increasingly difficult to plan for spending on public services. Government failure to recognise and plan for a decline in the construction and property sector has resulted in a sharp decline in total tax receipts.
“Sinn Féin is calling on the Minister for Finance to ensure that Budget 2008 contain reforms to redress the current overdependence of the exchequer on revenue related to property and consumption in order to ensure that the state continues to have the revenue necessary to fund key public services such as the health service.” CRÍOCH