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Posts in the "Government Spending" category

Low tax, low spend?

Posted on January 06, 2016 by Tom McDonnell

twenty euro close up

The NERI’s Quarterly Economic Facts contains a range of indicators on the public finances. One of these indicators compares levels of government revenue and public spending in the Republic of Ireland (Ireland) with that of other EU economies. The basic method of comparison is to measure total government revenue and total public spending as percentages of GDP. Total general government revenue is largely obtained from taxes and social security contributions but also includes other receipts of public authorities. The largest items of public spending by function are social protection measures (mainly social transfers), followed by spending on health and then spending on education. The early exchequer returns for 2015 suggest the public finances were approaching balance in 2015. An exchequer deficit of €62 million was recorded with an underlying exchequer deficit in 2015 of close to €3.4 billion.

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Permanent link | Categories: Government SpendingTaxation

Nothing comes from nothing: the case of health

Posted on December 06, 2015 by Tom Healy

Tom Healy, Director NERI - Tom Healy, Director NERI
Tom Healy, Director NERI

Health is better than gold or ‘is fearr an tsláinte ná an t-ór’ as the saying goes in Irish. Economists and statisticians tend to think of health as a cost as well as a sphere of activity involving consumption of resources in the present time. Health, however, has two dimensions: (i) It is a state of well-being for which all strive because it concerns body and mind and goes beyond narrow notions of ‘satisfaction’ or ‘utility’; and (ii) It involves work, behaviour, caring, time and money which enables people to be healthy not just this year but for years to come (hence it is an investment activity as well as a consumption activity).

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Permanent link | Categories: Government SpendingNorthern Ireland Taxation

What is a prudent fiscal space?

Posted on November 29, 2015 by Tom Healy

Tom Healy, Director NERI - Tom Healy, Director NERI
Tom Healy, Director NERI

One of the impacts of the recent economic crisis is that new expressions have been added to the English language, as spoken here. One such example is ‘fiscal space’. When the economy is growing there is, at one and the same time, more demand for public services (more school pupils and more demand for health services for examlpe) as well as less demand for other public services (when there are fewer persons unemployed). Rising or ageing population also impact on demand for public services and pensions.  Alongside changes in spending that are ‘cyclical’ revenue trends so that there is a natural jump in revenue as people spend more and receive higher incomes – boosting state coffers.  Separating out the temporary ‘cyclical’ effects and the ‘structural’ effects is not at all easy for economists and statisticians.

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Permanent link | Categories: Government SpendingInvestmentTaxation

UK Autumn Statement and Spending Review

Posted on November 25, 2015 by Paul Mac Flynn

The Autumn Statement delivered today by Chancellor of The Exchequer George Osborne will in all likelihood be remembered for one significant U-turn. The dramatic reversal on planned changes to tax credits represents a big win for opponents of the policy in Westminster and beyond. The total proposed saving from tax credits was to be £4.4bn UK wide. The changes would have affected over 120,000 households in Northern Ireland and would have seen incomes reduced by up to £1600 per annum. At the time of the Summer Budget, the tax credit changes were justified on the basis that other policy announcements would compensate for the loss. Chief among these was the introduction of the National Living Wage. Clearly this proposition has been abandoned and the 2015 NERI Winter Quarterly Economic Observer will outline why the National Living Wage could never have compensate for the loss of tax credits.See here

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Permanent link | Categories: Government SpendingJobsLiving wageMacroeconomics

NERI Seminar: Fiscal Priorities for Long-Run Growth

Posted on November 20, 2015 by Tom McDonnell

Neri poster - Nevin Economic Research Institute
Nevin Economic Research Institute

The latest NERI seminar  looked at the Irish economy’s recent performance and considered its medium-and-long-term prospects for growth. Over the course of the presentation a range of policy reforms to increase the economy’s long-run potential output were identified and discussed. Dr McDonnell set out the case for  increased investment in education and skills, particularly early years learning; to increase investment in the production, diffusion and use of new ideas. He showed how prudent investment in right types infrastructure is associated with long-run increases in productive capacity and argued that were capital markets are not well-functioning there is a strong case for a state investment bank to provide patient long-term finance to support innovative effort and technology diffusion.

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Permanent link | Categories: Government SpendingInvestmentMacroeconomicsTaxation

NERI Post Budget Seminar

Posted on October 22, 2015 by Daragh McCarthy

Post Budget Seminar, October 2015 - NERI Post Budget Seminar, October 2015
NERI Post Budget Seminar, October 2015

The NERI seminar series resumed yesterday with an analysis of Budget 2016—presentations from each of the three speakers are available below. The speakers outlined the budgetary choices facing Irish society with a special focus on issues related to childcare and housing. Thanks to Michael Taft ( UNITE ), John-Mark Cafferty ( Society of St. Vincent de Paul ) and Dáithi Downey ( Dublin City Council ) for their contribution. The next seminar in the series will take place on 18 November and will focus on ways to boost long-run growth in the economy— further details are available here .  

Slides

Michael Taft & ‘Clear Stark Choices—Budget 2016’ NERI Post-Budget Seminar , 21 October 2015, Dublin

John-Mark Cafferty & ‘Back to the Future’ NERI Post-Budget Seminar , 21 October 2015, Dublin

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Permanent link | Categories: Government SpendingInequalityInvestmentMacroeconomicsTaxation

A roof over your head

Posted on October 02, 2015 by Tom Healy

Tom Healy, Director NERI - Tom Healy, Director NERI
Tom Healy, Director NERI

A roof over one’s head and a safe, comfortable and healthy place that can be called home is a fundamental human right. Just as the issue of land was a central social concern and point of conflict in 19 th century Ireland, the question of accommodation was central to the social movement associated with the rise of trade unionism in the early years of the last century. Much of the social protest movement in both parts of Ireland seen in the late 1960’s was related one way or another to housing – or the lack of it or the quality of it. An extraordinary feature of what came to be known as the celtic tiger period is that huge distortions were created in the supply of housing with inappropriate supply by type, by cost and by location. 

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Permanent link | Categories: Government SpendingInvestmentLiving wage

Recent changes in public sector employment in OECD countries

Posted on September 02, 2015 by Daragh McCarthy

Public sector employment - NERI blog on public sector employment in the Republic of Ireland
NERI blog on public sector employment in the Republic of Ireland

The scale of public sector employment varies considerably across developed economies; however, the vast majority of EU member states are in a process of reducing the size of central government employment—between 2008 and 2013, Sweden was the only EU country that increased the number of general government employees.

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Permanent link | Categories: Government SpendingJobs

Social and economic investment holds the key

Posted on August 06, 2015 by Tom Healy

Tom Healy, Director NERI - Tom Healy, Director NERI
Tom Healy, Director NERI

Spending on productive capacity includes not just ‘bricks and mortar’ but all those resources that give rise to socially useful results over time. Spend today and reap a return in the future: this is the logic of investment. It can cover investment in education and skills as well as investment in knowledge and, of course, machinery, building, lands and equipment.  Not all forms of investment are equally productive and distortions can arise in favour of speculative, wasteful or socially destructive investment. In many cases the gains from investment are not fully captured by the private investor making the investment, this is common with investments in knowledge production for example, and significant under-investment can arise where private returns are perceived as too low or too risky. Lack of access to funds may also hamper investment if the cost of borrowing is too high or the terms and conditions too onerous.

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Permanent link | Categories: Government SpendingInvestmentJobs

The Structural Balance - Where Facts become blurred

Posted on August 05, 2015 by Tom McDonnell

Publication cover - Quarterly Economic Facts Summer 2015 - Cover image for Quarterly Economic Facts Summer 2015
Cover image for Quarterly Economic Facts Summer 2015

Ireland is expected to successfully exit the corrective arm of the Stability and Growth Pact (SGP) at the end of 2015. From 2016 onwards Irish budgetary policy will be subject to the requirements of the preventive arm of the SGP as well as being subject to national budgetary rules. The preventive arm of the SGP is assessed under two pillars.

One of these pillars is the structural balance rule. Any country not at its Medium-Term Budgetary Objective (MTO) is required to achieve a minimum improvement in the structural balance of more than 0.5 percentage points per annum.

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Permanent link | Categories: Government SpendingMacroeconomicsTaxation

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