The threat of a no-deal Brexit effectively handed Minister for Finance Paschal Donohoe a free hand to reject all but the most urgent spending demands in last month's budget. A finance minister's dream scenario, particularly if the threat fails to materialise.
The other big risk to the public purse was the possibility of a sharp contraction in corporation tax, which the Government has been using to plug holes in its expenditure.
Business tax receipts are inherently volatile because corporate profitabiliy is not linear. Also the global tax system is in a state of flux with the Organisation for Economic Co-operation and Development promising an overhaul of how companies are taxed.
Donohoe had predicted that last year’s record €10.4 billion corporate tax take was unlikely to be repeated as it was linked to a once-off payment by a single mutlinational made last November. But he’s been proved wrong. The latest exchequer returns show corporation tax receipts are up again this year, running at a record €6.9 billion for the first 10 months to the end of October.
"At this stage, it wouldn't be a surprise if figures for the full year were €1 billion ahead of last year," said Grant Thornton's Peter Vale. That would net the exchequer more than €11 billion.
Steady progression
Compare this with 2014 when corporation tax receipts for the year were less than €5 billion.
The massive onshoring of assets triggered by a global outcry over multinational tax avoidance instead of being a threat to Ireland has been a boon for the State, even if it has generated negative headlines.
And so the other big threat hanging over the exchequer has failed to materialise, giving the Government’s finances a rosy complexion as it heads into what will probably be an election year. In tax terms, you might say, the Government’s never had it so good.
