In Framing This Budget I Have Been Conscious That At Present Our Society: Public Finance Essay, NUI, Ireland

Introduction

In framing this budget I have been conscious that at present our society is facing great challenges. On the home front, the increasing numbers looking for work demand a truly exceptional employment performance — right through to the end of this decade. The overriding concern must, therefore, be to safeguard existing jobs and encourage the creation of new ones. As an essential element in this, the public finances have to be kept on a sound basis.

At the same time, our other “homeland”, the European Community, is embarking on historic ventures: the creation of a single market from January 1993, and the establishment of political, economic, and monetary union. These present us with tremendous opportunity, and so the Government is determined that we should participate from the outset of both, but they will equally test our policies, our attitudes, and our institutions.

I have, for both reasons, had to keep a prime focus on the changes that a more integrated and open Europe will require. I have had equally to recognize that successful participation in these great European ventures implies certain constraints. If we act wisely, we can share the economic prosperity of our successful partners. We can thereby make real and worthwhile progress in regard to employment and realistically aspire to the standards of social provision that prevail in our Community partners.

On the broader international front, the repercussions of near-recession in the world economy last year are readily apparent in aspects of our social and economic scene. I have had to take into account that fact and the expert view that recovery will be slow and patchy. At the same time, I was reassured by the resilience our economy had shown so far, fortified by the fundamental changes in policy and attitudes under the Programme for National Recovery and the Programme for Economic and Social Progress.

Review of 1991 Budget Outturn

As the 1991 Exchequer Returns showed, last year’s budget outturn was, in difficult circumstances, very creditable. The borrowing targets set at the budget time were only slightly exceeded. Tax revenue, after a slow start, picked up in the later stages of the year and ended the year on target. Within the total, indirect taxes showed the effects of the difficult trading circumstances, particularly in some areas like car sales, while direct taxes took up the slack.

Non-capital supply services expenditure last year exceeded the post-budget allocation by some £130 million. The main causes of this overrun have been well documented. Had the Government not taken resolute action in mid-year to contain the expenditure overruns then emerging, the excess of expenditure over budget would have been substantially higher.

In contrast to the current side of expenditure, Exchequer capital spending came in some £14 million less than the budget provision.