Key week for Finance Minister Donohoe on funding billions of Covid
Minister Paschal Donohoe faces key decisions regarding funding the additional billions needed to tackle the fallout from the Covid crisis amid increasingly severe restrictions due to the vaccine shortage.
Ireland’s budget for this year will be reviewed in the coming weeks by the European Commission, as government ministers do little to reveal what effects the Level 5 restrictions will have on its finances and the budget deficit.
The Commission will also decide and approve the programs Ireland has submitted for grants and loans under the EU-wide Recovery and Resilience Mechanism of € 675 billion – already widely criticized as being too puny compared to the billions pledged for American jobs offered by the White House under Joe Biden.
Minister Donohoe has already seen Treasury figures at the end of March which, when released on Tuesday, will likely bring good news, as at least one of the state’s top four sources of tax revenue , income taxes, holds up well.
For the first two months of the year, income tax receipts of 4 billion euros were ahead of the amount collected in January and February in 2020 before the pandemic, reflecting the billions spent on aid since. public policies to keep people in employment.
Tuesday’s figures for March could come too early to judge whether corporate tax revenues should improve on the € 11.8 billion the government collected in taxes from businesses in 2020.
But the question of whether Minister Donohoe will need to borrow billions more will come from the March spending figures.
In the first two months, net voting spending at € 8.9 billion was 11% before 2020.
In an assessment at the time of last October’s budget, the finance ministry predicted that this year’s budget deficit could range from € 20.5 billion to € 25 billion, if the lockdowns of the pandemic were recent.
Last week, the Central Bank forecast a budget deficit this year of 21 billion euros and 10 billion euros for 2022. This is in addition to the deficit of 19.6 billion euros last year.
Meanwhile, Spending Minister Michael McGrath released the first report on the National Development Plan Review.
“We are focused on delivery,” he says.