November Exchequer Returns

Available here.

44 replies on “November Exchequer Returns”

1. This can’t be happening.
2. Ok it’s happening but it’s a once-off.
3. Ok it’s not a once off but it’s dirty multinational money.
4. Ok it’s dirty, but let’s spend it on my pet project anyway.
5. And if only we had burned the bond holders and rejected all austerity measures we’d have twice as much to spend on my pet project.

Interesting to see how little emotion this and other recent good news evoke in those contributing to this site. If the tax inflows had under undershot projections by similar proportions the site would be indundated with Schadenfreude.

True enough.

Great news. Debt interest still high but going the right direction rapidly. Balanced budget deficit by Christmas 2016 anyone?

QE works for Ireland anyway. Cheap debt rollovers and super competitive exchange rates. Long may the financial engineering winds stay at our backs.

It’s the fellas in IFAC I feel sorry for, everything they say is 6 months out of date such is the speed of the turnaround.

I hope we don’t get a giveaway élection. The numbers are good but the overall content remains incertain.

In addition to the performance of the MNC enclave (which can be volatile) it appears that the remarkable resilience of the indigenous non-sheltered sectors – for too long burdened and suppressed by the rent capture and inefficiencies of the sheltered private, public and semi-state sectors – is finally coming to the fore. A wide range of international factors, favourable demographic factors and the continuing unstinting performance of the large number of workers in the lower reaches of the sheltered sectors (who benefit little from the rent capture of the higher ups and who are not responsible for the cock-ups and inefficiencies) have contributed to this much needed and belated improved perfromance of the non-sheltered sectors. Long may it last.

The burden imposed by the sheltered sectors still weighs heavily and unjustifiably, but the development of some momentum in the non-sheltered sectors (both foreign-owned and indigenous) should ease the carrying. It is important though that the rent capture and inefficiencies of the sheltered sectors are prevented from increasing pro-rata (and more than pro-rata) with the economic performance of the non-sheltered sectors – as they did in the run-up to the triple blow-out in 2008. But it’s hard to see how this will be avoided given the likely increased fragementation of political representation.

It looks like it’ll be the continuation of “another lap for the Irish hare” (as Prof. Honohan memorably put it in 2009) with hardly anything learned from the previous lap.

The degree of overshoot on the tax side also surprised the government and it wasn’t till October that it decided to spend some of the additional revenue, announcing the €1.5bn increase in current expenditure, which irritated IFAC. It now transpires that spending is still running below the original Budget target and the State would have to spend over €4bn net on the current side in December to meet the revised projection, which Minister Howlin has said will not now happen.

The figures do not include the €1.64bn payable to the State from AIB’s partial redemption of Preference shares.

I would like to see the extra, possibly once-off or at least volatile, €2.3 corporation tax used to build social housing at a matter of immediate urgency.

I do not understand the fetish with wishing to pull back Debt/GDP so quickly. If the country managed to survive with Debt/GDP over 120%, why the urgency to get it back to 90%?

This is a question of both social and national priorities, and it seems to me that the housing problem is now of such a scale as to trump, by a large margin, the priority of the already well housed fiscal conservatives.

I suppose this is where the light is. I have persistant doubts about this odd ‘recovery’ that is alleged to be occurring – when our western economies appear to be in quite a lot of difficulty. Sure, some Asian economies are displaying a continued positive Rate-of-Growth, which when aggregated with the low levels of several key economic variables in the US (don’t believe the media spin), the UK (ditto) and EU, provide a misleading arithmetic mean estimate. Odd. Needs to be explained, not spun. Historically low cost of credit, below-cost prices for fossil fuels, production raw materials and foodstuffs???

On a somewhat sombre historical basis. Ireland suffered a long, 15 year, recession from 1980 through 1995. It advanced steadily (by what means?) for the next 12 years, then recessed again from 2009 until 2014. Whether the current, quite modest upturn continues is arguable. We just have to wait-and-see ( we are at similar level to where we were in 1997/1998). Mind you we have improved our communications technology since then, but what else? Do computer controlled devices and robotics constitute real, as opposed to a virtual, improvements?

I note from a brief news item this morning, that housing approvals in Dublin and some of its sub-urbs are a tad muted, some folk are mightly discouraged about being ever able to ‘afford’ a home of their own and residential rents are rising? That’s odd – i’fn you believe all the brash baloney about our alleged economic recovery.

Now if – there was an all-round increase of 50% in wages and salaries. Then we would be sucking diesel! Ah, well. Just see and hear what you want to see and hear: and disregard the rest.

On a lighter note: some Christmas reading. Try Upton Sinclair’s (1926) “Oil!”. Penguin.

And no sign of things slowing down.

@Paul Hunt

The legal profession and commercial property owners – if we could sort those out then a lot of the burden on the economy would be relieved.

To be fair a lot of reform has happened. The income my own university gets from the State has been drastically reduced, but our overall financial well-being is not too bad at the moment, because most of our staff knuckled down and helped to find alternative revenue streams. The university sector is undoubtedly more efficient than it was 8 years ago.

The corporation tax surge will last for a few years. Facebook cannot report annual losses in the UK forever.

Apple may account for up to half of the current rise.

@ Johnny Foreigner

It’s the fellas in IFAC I feel sorry for, everything they say is 6 months out of date such is the speed of the turnaround.

In the next step dissenters will be charged with “talking down the economy”!

In 2001 Ictu joined the rest of the establishment in rejecting the censure by the European Commission of the Government’s budgetary strategy.

Months later, when the OECD said Ireland’s social partnership needed to evolve towards setting general principles and guiding pay determination rather than committing the Government to delivering specific tax cuts, the then incoming Ictu president, Senator Joe O’Toole, criticised “academic bean counters” and said they speak from Paris “with an air of authority that is utterly undeserved,” when different governments and groups were queuing up to find out how we earned our economic success.


The tax surge will end, but employment will continue to grow, VAT and income tax receipts will continue to rise, tech/pharma/food still the industries to base your economy on, windfalls from AIB and NAMA, smart well-trained ambitious immigrants returning, favourable demographics, weak euro, cheap oil, and maybe a more fiscally conservative electorate (finally)… plenty of legs in this yet.

@ DO’D: I’d opine that they need to exhume Air Chief Marshall (Bomber) Harris and Air Force General Curt Lemay. Now those two bozoes would show them pesky wallahs what a real area-bombing campaign should be like. Not this pin-prick, key-hole, laser-guided nonsense. GAZA 2014 gives a precise visual exactitude of the overall effect to be achieved. Bring it on!


They call bombs airstrikes now. Except when it’s Syrian regime barrel bombs.
But the picture is so complex. Salafi mosques in France and Turkey supporting Nusra . Injured jihadis recover in Turkish hospitals. The Turks will do anything to suppress the Kurds and the only decent anti jihadi fighters in Iraq are the Kurds. So France bombs jihadis while talking accession with Turkey and hosting nihilist salafi imams. But images of Tornado and Mirage bombing jets go down well with the middle classes on the evening news

And still no sign of 2% inflation.


I logged on here a few minutes ago expecting to read a few new replies on Exchequer returns, and I find two posts all about Syria and Bomber Harris. Can I respectfully request that these be deleted, and that we have a special kiddies corner for all sorts of non Irish Economy stuff.

Patrick Cockburn in The Independent is, imho, the best journalist on this stuff.

Robert Fisk not far behind.

Origin: Saudi Wahabbi and US neokon doctrines

as for Inflation it is now heading in the direction of -2% which basically sums up the arzeways macro policy of the radicalized ordoliberal financial system jihadi wallahs in the ECBundesbanke … or maybe just a typo on the ECB’s remit …. Germans don’t like inflation … so deflation! IN its own way EZ policy is as daft as the so called ‘Westhern’ policy on the ME.

BTW What is Hibernian inflation at the mo? Bonds anyone?

“And still no sign of 2% inflation.”

What did you say, about some folks taking the p*ss? 2% inflation, over 34.5 years = your savings/2. That’s nice, that is!

Appropos the aerial delivery of IEDs: I’d prefer the deep-bass throb of RR Merlin engines! At 4 x 400 – it’d put the fear of Allah in ye!

@ John Sheehan

I have been following this board since its inception and I find the contributors to be quite adult, although not always ‘serious’. All economy is political economy after all.

2% inflation transfers the wealth from one generation to the next in 40 years. 0% does not. -2% is worse.

Anyway there is no growth. Draghi is a spoofer. The next crisis is inevitable. And it won’t be a shock either.

War is expansionary macro par excellence. By destroying wealth, growth is enabled innit. When cpnsumers are deleveraging war keeps cash flowing. Syria will be ripe for investment. Are there any arms companies taking advantage of the 12.5% yet?

@ PQ

It is particularly hard to take a topic seriously when those involved are not doing so cf. Fintan O’Toole in a recent contribution.

For some reason, I have this image of Finance mandarins in stiff collars, sitting at high desks, wielding quill pens across unwieldy ledgers while the Revenue Commissioners are generating detailed electronic tax collection data. The failure to modernise the presentation of the expenditure side of the ledger is attributable to political, not technical, factors. We prefer, evidently, to listen to ministers speaking in the first person about how they have allocated so many additional millions to this or that activity, depending on the political echo.


‘Are there any arms companies taking advantage …?


On corporate tax receipts!

@Minister Noonan

Are you roight there Michael? Are you roight?

How’s the ‘special deal’ on the odious banking debt coming along?


With so many C-suites getting their snouts into share buybacks there is very little investment anywhere. Much Capital spending is being propped up by arms companies .

And war, of course, is great for degrading infrastructure that subsequently needs investment. Wars are so important when economics runs into the ditch. And post war infrastructure investment can power growth for years .

But what have we got now? QE. And we don’t even know if it works.

“QE has become the weapon of choice by these governments because it is the only way in which recovery – however slow and anaemic – could be generated without changing the economic model that has served the rich and powerful so well in the past three decades.
This model is propelled by a continuous generation of asset bubbles, fuelled by complex and opaque financial instruments created by highly leveraged banks and other financial institutions. It is a system in which short-term financial profits take precedence over long-term investments in productive capabilities, and over the quality of life of employees. If the rich countries had tried to generate recovery through any other means than QE, they would have to seriously challenge this model.”

But finance is no longer serious.

This comment by Gene Kerrigan may strike a chord with the electorate. The answer may well be what it has been hitherto; who cares!

A less histrionic version would be that 10 international corporations, mainly from the US one assumes, pay half the corporation tax.

One cannot link to the SBP but this excerpt from its lead article toady also fits into the quill pen image.

“Senior civil servants are demanding a new benchmarking process in the new year to bridge what they claim is a growing pay gap with the private sector.

They want to break their traditional link with the salary of a TD because they believe there is a lack of public appetite for increasing pay for politicians.

The Association of Higher Civil and Public Servants (AHCPS) claims that salaries of senior civil servants are up to 30 per cent lower than the private sector.

AHCPS general secretary Ciaran Rohan said the growing gap between public and private sector pay was “slowly decimating” the civil service.

“You want to have the brightest people there because they are the people helping to run the country. And if you don’t have a reasonable pay structure, you are just not going to get the people,” he said.”


Traditional link? cf Chapter 7.

“A less histrionic version would be that 10 international corporations, mainly from the US one assumes, pay half the corporation tax.”

Why does a dog lick his *******s

a) Because he was advised by one of the Big 4 ?
b) Because he can ?
c) Both of the above

Also useful on the expenditure side, the OECD pen picture of Irish health spending.

The problem is not the level of expenditure but how it is distributed. As the recent debate on the delay in vital cancer scans for public patients has revealed, there is an “apartheid” system, as one commentator put it, which is a blot on the public conscious.

One other interesting quote from the SBP article.

“The AHCPS is campaigning for a new pay process to be put in place next year to review their salaries, in the hope of getting further pay rises as the economy improves.

It is opposed to the recent call for a new performance-related pay system to replace annual increments for civil servants, which was suggested last week by Department of Public Expenditure secretary general Robert Watt.”

The head of an entirely misnamed and superfluous department of state is, perhaps inadvertently, going to the heart of the problem i.e. there is no market rate for individual jobs anywhere in the public sector because remuneration is not related to individual job descriptions but on the basis of grades. It would be in the interest of all parties if this was recognised and the necessary conclusion drawn.

“This comment by Gene Kerrigan may strike a chord with the electorate. The answer may well be what it has been hitherto; who cares!”

There is nothing at all difficult to understand about why tax revenue has increased so much this year. The fact that Kerrigan and various public servants don’t understand it is simply a reflection of their own lack of intellectual prowess. Plus, on Kerrigan’s part at least, real anger and bitterness at the turn the economy has taken in the past few years, disappointing in a most cruel way the high hopes he had back in the giddy days of 2009 of total economic meltdown.

Quite simply, tax revenue generally increases more or less in line with growth in nominal GDP/GNP, give or take a bit for any tax rate rises/reductions.

It looks like nominal GDP/GNP in Ireland will rise by 10%-12% in 2015, made up of a 6%-8% real volume increase, on top of which the fall in the value of the euro v sterling and the dollar has added a windfall element that is further boosting nominal GDP/GNP.

Tax revenue looks like increasing by approximately 10% in 2015, bang in line and more or less exactly what one would expect given the growth, both in real GDP/GNP and nominal GDP/GNP.

If Kerrigan and the public servants he mentions had read a few posts I put on this site back in January/February when I predicted the tax revenue boom (nothing great about my prediction as both the real growth and the fall in the euro were already apparent by then), they’d have no problem understanding it. Actually, in my posts back in January/February I predicted that the government would have a budget surplus this year. This prediction now looks like being wrong, but only because in its October budget the government announced a raft of public spending increases to take effect this month. The government actually did have a surplus in the first 11 months of the year.


health is already a black hole before mentioning longevity and years of ill health at the end of longer lives. The HSE and the NHS are looking at very different futures.

Right again. No one is listening though, the Irish economy has become tedious to most Irish economists.
Had an interesting conversation over the weekend with a guy who works with one of the big pharma companies in Ireland. Loads of new effective and lucrative therapies coming into production in the last 2 years (nearly all developed by small biotech outfits which are then bought by the big firms). Ireland keeps winning the job of producing these drugs because it is seen as extremely stable (as opposed to somewhere like Egypt) and the work is done to the highest possible standards (unlike many countries in Europe). This trend is only going to accelerate and there is a lot of facility expansion in the pipeline. Shifts are increasing as well. A lot of the new drugs require production technology that is not easy to roll up and export, meaning that any decision to expand in Ireland is for the long term. Chemical engineers are in short supply.


I would not be a regular reader of Kerrigan. However, I thought his piece of value because he referred to the uncertain nature of corporation tax.

I did not notice my spelling error until now. Either the electorate is not conscious of the unfairness of the health system or it has no conscience in the matter. Probably the latter.

It is hard to recognize Ireland as it is with the picture often portrayed. The most striking feature about the economy is the extraordinary population growth seen over the past 20 years, which neither public policy nor public perception appears to have adjusted to. The population grew from 3.92mn in 2002 to 4.49mn in 2011, a 17% rise compared with a 4% increase in the EA as a whole. The headline figures about ‘Irish’ emigration in recent years masked the strength of immigration and the fact the population has continued to grow, albeit at a modest pace, and is currently estimated at 4.62nmn. Clearly that has put huge pressure on resources, from the transport infrastructure through the education system and health to housing, yet we have never seemed to accept this was happening let alone plan in a coherent way. As a simple example, look at he housing situation- rent controls, introduced for short term political expediency, which presumably will reduce housing supply if anything, and a much hyped NAMA plan to ‘build’ 20,000 houses which turns out to mean a search for partners in funding and starter homes at 350k, which with the central bank credit controls (credit has been falling for 6 years anyway) means a buyer has to have saved 70k.


“Quite simply, tax revenue generally increases more or less in line with growth in nominal GDP/GNP, give or take a bit for any tax rate rises/reductions.”

Corporation Tax fell by 45% between 2007 and 2011, from 6.3 billion to 3.5 billion. Just as well that GDP or GNP did not fall by those amounts!

Corporation tax as a % of total tax from 2011 to 2015 (Nov) was as follows:
2011, 10.0%
2012, 11.5%
2013, 11.0%
2014, 11.2%
2015, 15.0%.

The DOF, in their wisdom had profiled (Nov 2015) Corp Tax at 10.3% of total tax take, a fall from previous years, despite a rapidly growing economy. To use their own words, the DOF is indeed ‘flying blind’.

It is crystal clear, to anybody looking at the situation, that the corporate sector had not been contributing anything like a fair share of revenue, either in terms of corporation tax, employer social insurance (PRSI), or employee pensions.


WRT your point about population and housing, there seems to be much more enthusiasm for ‘social partnership’ than ‘social housing’ when it comes to the carve-up of fiscal space.

The banks are not paying CT anymore. Irish indigenous industry is not paying a lot of CT tax either. CT running €2.2B ahead of last year. At 11% about €20B pretax profits ahead. Either large revisions upwards to 2014 GDP figures or very large increase in 2015 figures.

” …. a much hyped NAMA plan to ‘build’ 20,000 houses which turns out to mean a search for partners in funding and starter homes at 350k, which with the central bank credit controls (credit has been falling for 6 years anyway) means a buyer has to have saved 70k.”

Its the median after-tax income which determines whether or not a residential mortgage is viable. Prudent lending rules are required – and are well known and understood by mortgage lenders. Prudent lending rules have been discarded. Its all about margin and income stream. Not a stable, low-risk lending environment for borrower and lender alike.

Cash buyers excepted, the price paid for a residential property is determined solely by the amount of the mortgage loan that a lender will advance for that property. The individual borrower has no backstop if their income falters or fails. The lenders are backstopped by the taxpayer. Its a complete no-brainer for the lenders: lend! lend! lend! Unless lenders are restrained: and the more and the sooner – then the better for the borrower.

A cash deposit of 20% of purchase price is the minimum needed: quite proper. However, for a ‘starter home’ a deposit of 70,000 euro is, I agree, completely daft. It properly should be 20,000 or less, which equates to a property price of 100,000 euro – or less.

If lenders have zero incentive to be prudent in mortgage originations, then you will get what you should expect; unaffordable house prices. Unaffordable in the sense that the prices being paid are more than 3 times the multiple of a single basic income. Irish mortgage lenders should be asked to explain how residential mortgage default rates have risen 20 fold in the space of just over two decades. They’re one hundred percent responsible for this deplorable situation – but you will not hear them admit to it. Also, might we get some information of the proportion of after-tax incomes in different sectors of population that are being used to pay down their residential mortgages. If its above 28% then the risk of mortgage defaults will increase sharply. And aggregating two incomes for a mortgage loan is really asking for trouble – and should be prohibited.

These comments assume a steady, rising private residential property market – say, 3% annual, compounding. In a static or declining market the prudent lending rules have to be ‘upped’ significantly. Politically most inconvenient.


“Its the median after-tax income which determines whether or not a residential mortgage is viable. ”

Yes that is true, but those ‘medians’ that once aspired to own a house are being pushed relentlessly and remorselessly out of home ownership. Homes are now to be seen as the assets and potential assets of the capital.

Per the CSO, home ownership rates were as follows:
1961, 38%
1991, 73.1%
2011, 61.6%

In reality the 1961 figure is distorted, as while local authorities were the nominal owners of much of the housing, in practice, the owner -occupier had lifetime tenancy ( and beyond in respect of family).

In order to get a view of how this happening, and how working people are being converted to income producing tenants, I have outlined the following data.
The 20 year rise in UK house prices Q3, 1995 to Q3 2015, from the Nationwide data.
York % Hside, 198.3%
North West, 196.8%
East Midlands, 237.6%
West Midlands, 214.8%
East Anglia, 272.8%
Outer South East, 320.2%
Outer Met, 360.2%
London, 501.1%
South West 285.8%
Wales, 214.8%
Scotland, 171.2%
N Ireland, 212.6%

All UK, 281.3%

It is clear that no median, mean, or mode wages would have kept pace with the above house price rises, thereby consigning to lifetime renting workers, who might previously have aspired to home ownership .

The matter is further compounded by QE, with trillions of low-cost funding being dished out to wealthy recipients, to mop up the ‘residential housing assets’, pushing aspiring home out of home ownership and into renting.

@ JR: Thanks for that info. Lots to think about there. Not pretty,

We know that wealthy folk are quite stingy about putting their own wealth or money where their mouths are, would baulk at constructing new housing and are also known to be a tad laggardly about the maintenance of existing stocks. So, I expect that they will break-out their Oliver Twist begging bowls (again!) and crank-up their well-rehearsed whinge of – “Please minister, give us some more” — (taxpayers money, that is). And our feckless politicians and supine journalists start to echo this mealy-mouthed chorus. Needs careful watching.

@ JR

With house price rises like those the UK model is more neo-Victorian than anything else. I bought a place in 2000 with a 10% deposit. The price is now 3x.
Deposit required would be 20% or 6x mine. Nurses and teachers haven’t a hope.

Neither do Central Bankers. There is no way interest rates can revert to normal.

Comments are closed.