Table 2

EXPLANATION OF NET DIFFERENCE BETWEEN EXCHEQUER BALANCE AND GENERAL GOVERNMENT BALANCE


The Exchequer Balance is the traditional domestic budgetary aggregate which measures Central Government's net surplus or borrowing position. It is the difference between total receipts into and total expenditure out of the Exchequer Account of the Central Fund.
The General Government Balance (GGB) measures the fiscal performance of all arms of Government, i.e. Central Government, Local Authorities, Health Boards, Vocational Education Committees and non-commercial State sponsored bodies, as well as funds such as the Social Insurance Fund and the National Pensions Reserve Fund which are managed by government agents. It thus provides an accurate assessment of the fiscal performance of a more complete "government" sector.
The GGB does not reflect the position of commercial State sponsored bodies as these agencies are classified as being outside the General Government Sector.
The GGB is calculated in accordance with ESA95, a consistent standard developed by the EU to facilitate budgetary comparisons between EU Member States in accordance with their obligations under the Maastricht Treaty.
Details of the variation between the Exchequer Balance and the GGB are set out in the table below.
 
   
2003
2004
2005
2006
 
Estimated Outturn
Post-Budget Estimate
Projection
Projection
 
€m
€m
€m
€m
Exchequer Balance
-1,510
-2,806
-3,432
-3,280
Interest adjustments (a)
-394
-148
-145
-140
Exclude equity and loan transactions (b)
-72
-72
-68
-66
Net (Borrowing)/Surplus of non-commercial State sponsored bodies
-59
-23
-
-
Adjustments for Transactions between the Exchequer and Government Departments/Offices and Extra-Budgetary Funds (c)
-27
-94
-23
-12
Impact of the National Pensions Reserve Fund (d)
1,306
1,390
1,499
1,617
Accrual Adjustments (e)
167
170
201
204
PPP/NDFA capital projects (f)
-
-
-410
-553
Net (Borrowing)/Surplus of Central Government
-589
-1,583
-2,379
-2,230
Net Surplus of the Social Insurance Fund
209
148
357
495
Net (Borrowing)/Surplus of Local Authorities
-214
-200
-105
-110
General Government Balance
-594
-1,635
-2,127
-1,845
Net Difference between Exchequer Balance and GGB
916
1,171
1,305
1,435
Figures may not add due to rounding
(a) This adjustment reflects the requirement, under ESA95 rules, that changes in the assets of the Capital Services Redemption Account and capital gains or losses on foreign exchange contracts, swaps, etc., should be excluded from the interest recorded for the purposes of calculating the GGB. An adjustment for interest accrued but not paid on small savings is also included.
(b) Equity and loan transactions are excluded from the GGB on the basis that they affect the composition but not the level of assets and liabilities.
(c) Transfers between units within the General Government Sector do not affect the GGB.
(d) The National Pensions Reserve Fund (established in 2001) is within the General Government Sector and transactions within the Sector do not have an impact on the GGB. These figures include the contributions paid from the Exchequer and a provision for income earned by the funds.
(e) This adjustment is required in respect of certain transactions recorded on an accruals basis in calculating the GGB. The main adjustments are in respect of Value Added Tax receipts, Excise duties and Departmental Balances.
(f) This adjustment relates to the capital cost of infrastructural projects where finance may be raised through Public Private Partnerships or the National Development Finance Agency and which impact on the GGB over the period of construction of the project. The Exchequer impact of any such projects would be through annual payments from the relevant Departmental Vote over the life-cycle of the project.