THE Treasury says it is on track with its budget refinancing programme – despite a half-year report showing a £51 million net deficit for the first six months of the year.
The government has lost a nearly a third of its income in the wake of the VAT bombshell, resulting in an unprecedented squeeze on public finances and the need for a three-year rebalancing programme.
To balance the books this year, £55 million was transferred out of reserves.
But the half-year report covering the six months to the end of September show that the net deficit was £51 million, £22.6 million higher than the previous year.
However, Treasury Minister Eddie Teare MHK insisted the government was still on track.
He said the shortfall was simply down to the timing of receipt of funds. ‘At the end of the year we still expect to come in on target,’ he said.
The actual balance brought forward at the start of April was £56.7 million, £11.8 million higher than the ‘probable’ figure shown in the February Budget.
This was the result of income being £2.9 million higher and expenditure being £3.9 million lower than predicted.
Customs income for the first six months of the year was £147 million, £24 million down on the same period last year.
Mr Teare revealed that spiralling pump prices had led to a significant drop in fuel consumption, which fell 2 per cent from £51 million to £50 million last year and had already fallen by a further £600,000 in the first half of this financial year.
But on the other hand, govrment receipts were hit by the by the deferral of the fuel duty increase to January 2013 – although the local VAT collection was boosted by stronger online gambling duties.
Income tax receipts for the first six months to September 30, however, are up £4.6 million on last year to stand at £58.4 million.
Mr Teare said that while personal income tax and National Insurance were ‘flatlining’, corporate tax receipts were doing well and have recovered better than expected from the economic turmoil of 2008.
The half-year report shows that while a number of government departments – notably Home Affairs, Community, Culture and Leisure and Education and Children – have extremely tight financial targets to meet, there is as present no clear evidence that will not ultimately meet their original budgets.
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