May Exchequer Returns

The exchequer returns for May are in. Here‘s a (new?) webpage with all the Exchequer statements for the year. I’ve heard the report described as good news because it means revenues are only 1.2% below target. That said, these revenues are 10.4% down on the same time last year. Also, revenues were only 0.1% below target at the end of April. Let’s hope we don’t have too many more months of this kind of good news.

12 replies on “May Exchequer Returns”

Americans have been abandoning their yachts for two years now, as mooring and other charges were too much. But hey, more investment! Has to be good!

“Economic recovery”! Wow! Guess drugs are cheaper now. Capital investment is needed to remove bottlenecks and obstacles when the economy is expanding … but when it is contracting? More debt? Why?

So naturally taxes are falling. And will continue to fall. No genius needed to predict that now. So, more and heavier taxes needed. Delay costs money, borrowed at staggering real interest rates! Good news though it is slowly becoming a smart economy!

Maybe if we wait, the government will come up with something!!!!!!!!!!

So this year’s deficit so far is only E7.9 billion compared to E10.6 billion this time last year. That sounds good in a McArdle-esque way. However, the E3 billion NPRF that was frontloaded into 2009 should be reversed for comparability so that last year’s pro-forma was E7.6 billion compared to this year’s pro-forma of E10.9 billion. Different headline really?

Taxes are down 1.2%. The expenditure under-spend is attributable to timing issues.

And the piece de resistance? The sinking fund to pay the national debt – like whipping out the laser card to pay the mortgage.

Where is John the Optimist by the way?

Oops – €250m for NAMA in May 2010, not €200m.

NAMA already has €49m from the govt for the SPV and has presumably received €51m from the third party makey believey investors. NAMA was reported to have made a profit of €25m on due diligence expenses because it had minimum contracts with the banks.

The development pot as described in the NAMA Act was being funded by NAMA bonds.

So why €250m now?

@ Jagdip Singh

“Anyone care to speculate on the reason for the €200m payment to NAMA during May 2010”

Chicken wings from the Elephant and Castle maybe?

Actually thinking about it, the €250m is so significant that I can only think that it’s for ‘working capital’ (a category of expenditure like development completely omitted from the draft Business Plan). So maintaining and securing sites and possibly paying developers to be consultants on their own projects. Even so, it’s still pretty huge.

Jagdip Singh,

This would have to be a loan to NAMA LTD, no? Otherwise the majority private owners should have invested a proportionate amount or get diluted.

@Ahura Mazda,

it seems that the MfF provided a one-liner explanation on Tuesday in which he said “The second [tranche of funding, the first was €49m for the SPV] was an advance of €250 million, which must be repaid to the Central Fund by 31 October 2010, to provide the Agency with a liquidity buffer to meet working capital demands pending the establishment of its own funding programme.”

So it is a loan and is for working capital before the development pot process is worked through. Also it runs a coach and horses through the concept of NAMA being independent – if NAMA has to pick up the begging bowl and prostrate itself before the DoF whenever it needs working capital, then how independent is NAMA?

As regards tapping the other SPV “investors” for more funds? I’d love to be a fly on that wall during that conversation!

Thanks Jagdip,

Makes sense. It will be interesting to see how the “development pot” is funded. I assume the banks won’t be obliged to take it.

Personally, I don’t see why NAMA would offer finance to developers. I’d foreclose, establish shortfall (through an auction process) and seek additional recoveries where possible. If NAMA still owns the property post auction, then NAMA uses “developement pot” to employ project managers and contractors to complete construction.

@ Ahura

That’s the businesslike way to approach the matter. But NAMA is a funny kind of business. It has to manager the assets in such a way as to ‘protect the economy’. How that task is conceived is a matter of discretion in each case. Strategic considerations, broad view, exceptional circumstances, etc leave plenty of room for manoeuvre.

As there is no FoI, the political steering of funds seems all too likely to continue. Plus ca change.

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