The Minister for Finance, Mr McCreevy, has not ruled out tax increases to keep the public finances in balance. He told the Dáil his over-riding consideration was the "long-term sustainability of public finances" and "what is necessary to ensure that, will be done," he said.
He also said he still expected an exchequer surplus of around € 171 million. And he outlined the total expected cost of the Special Savings Incentive Accounts, which he estimated at €2.586 billion over the lifetime of the scheme. He dismissed claims by Labour's finance spokesman, Mr Brendan Howlin, that even though the Department of Finance had told him the SSIA scheme would cost an estimated €417 million each year, the Minister subsequently twice told the Dáil his best estimate of the cost was €127 million.
Mr McCreevy insisted he had repeatedly said "the cost of the scheme depended on its uptake".
The cost to the exchequer of the scheme was €71 million last year. Mr McCreevy told Mr Howlin that it would cost an estimated €429 million this year, €517 million each year between 2003 and 2005, €446 million in 2006 and € 89 million in 2007.
Mr Paul McGrath (FG, Westmeath) asked if the Minister would do the costings on the Programme for Government. Mr McCreevy said the Government's priorities were set out in the programme but "the over-riding rule is to keep the public finances close to balance or in surplus".
When Mr McGrath asked him to "confirm that no tax increases will be imposed" to implement the Government's programme, the Minister said that sustaining the public finances was the over-riding consideration and whatever was necessary to keep the public finances close to balance, or in surplus, would be done.
Earlier the Minister told Fine Gael's finance spokesman, Mr Richard Bruton, he expected income tax receipts "to recover over the remainder of the year". He confirmed that to date, they were down 14.7 per cent on last year compared to a target increase of 1.1 per cent for the whole year.
Mr Bruton said "clearly something has gone wrong with the Department's capacity to forecast income tax receipts and the Minister appears to be covering it up".
The Minister said that from this month on, "most of the distortions caused by the changes to the income tax year will be washed out of the system".
Mr Bruton said that if income tax receipts were to be on target, "they will have to grow in the second half of the year by 20 per cent, 20 times the level of growth he projected for the year".
Mr McCreevy said income tax receipts were likely to be lower than the amounts budgeted for "but receipts under headings other than income tax, such as VAT, will be higher than expected".
