Today’s Budget will increase tax take from €37.8bn in 2013 to €40.04bn in 2014.

Government spending (current and capital) will reduce by €1.52bn.  The Government is anticipating a further reduction in spending of €440m in 2015.

In the context of forecasted low GDP growth in the Euro Area and the UK for the next few years, the Government is expecting economic growth (GDP) of 2% in 2014, 2.3% in 2015 and 2.8% in 2016, with a small reduction in unemployment in each of those years.

The budgeted deficit as a percentage of GDP is continuing to move in a positive direction.  After targeting for a 7.5% figure for 2013, an out-turn of 7.3% is now expected and is budgeted to further reduce to 4.8% in 2014.  However, the General Government Debt as a percentage of GDP is projected to reduce from 124.1% in 2013 to 120% in 2014.

The difficulty for the Government in framing Budget 2014 is that income tax for self-assessed individuals is due to be paid in October and November 2013.  14% of the 2012 total income tax yield was collected in November 2012.  Any shortfall will have an impact on Government targets.