The Department of Finance and the Central Statistics Office have confirmed that Ireland's debt level last year was €3.6 billion lower than previously reported.
The CSO explained that last year, one Government body, the Housing Finance Agency (HFA), for the first time borrowed €3.6 billion from another, the National Treasury Management Agency (NTMA). In previous years, HFA had borrowed on the open market.
The CSO said this €3.6 billion was mistakenly treated as external borrowings and wrongly added to the calculation of general Government gross debt. If one State body owes another money, it is not counted in this figure.
As a result, the correct figure for last year was 92.6% of GDP, rather than 94.9%. The CSO said the error was recently drawn to its attention by the NTMA. It added that, overall, the State is "no better of worse off" as a result of the correction.
A spokesman for the NTMA said the Department of Finance was responsible for calculating government debt, adding that the agency raised the issue of potential double-counting with the department "on a number of occasions from as far back as Autumn 2010".
TASC urges no more spending cuts
Independent economic think-tank TASC has called for an end to what it calls the "narrow focus on government finances" in the Budget.
In a pre-Budget submission, it says the deficit can be managed only as part of a strategy to support jobs and increase demand in the economy.
TASC says austerity measures so far have been counter-productive, quoting IMF figures as showing that the €6 billion of measures in the last Budget reduced the structural deficit by only €2.2 billion.
The group is proposing no overall cuts to public spending, with the reinvestment of any savings back into welfare and frontline services. But it says €2 billion of public spending can be saved every year from 2012 to 2023 by restructuring the 'promissory notes' for Anglo Irish Bank.
TASC calls for €1.2 billion a year from the National Pension Reserve Fund to be invested in education, skills and training over the next four years.
It proposes €3 billion of tax measures, including a 0.3% residential property tax, accompanied by a cut in residential stamp duty to 0.03% and the abolition of the second homes levy.
TASC urges the extension of the universal social charge to all gifts and inheritances, and to capital gains. It calls for increases in carbon tax, increased excise duties and a 20% tax on sweets and sugar-sweetened drinks.
TASC's head of policy Sinéad Pentony said the Budget must protect low income groups. Ms Pentony said a TASC analysis of Budget 2011 had shown that those on lower incomes were proportionately worse affected by Budget measures than those on higher incomes.
