1. Fiscal policy in Ireland: an introduction
Presentation for students in the
University of Limerick
Thursday 6th November 2008
Dr Aidan Kane
Department of Economics
NUI Galway
www.aidankane.net
Slide 1

2. Themes
• Key concepts in fiscal policy
• ‘Getting your hands dirty’ with fiscal data
• Patterns in fiscal policy since c. 1970
• The current fiscal policy challenge for Ireland
Slide 2

3. Fiscal Policy
• From ‘fiscus’ meaning ‘treasury’
– government expenditure and revenue activities
– and the gap between them: deficits/surpluses
• all of the are flow variables
• they have stock counterparts;
– deficits add up to debt
– more generally: to assets and liabilities
• Distinct (at first sight) from monetary policy
– money supply, interest rates, exchange rates, credit policy
– though ultimately they are related
– and/or from regulatory/competition policy
• A word about the ‘government’
public, state used sometimes interchangeably
but central, local, federal/EU
where to draw the boundaries? Slide 3

4. Getting your hands dirty with the data
• in CSO National Income and Expenditure
(annual)
– CSO databank direct /Economy/National Accounts
• and in Budget 2009
– ‘Budgetary tables and statistics’ in the set of
documents on www.budget.gov.ie
– also Monthly Exchequer Statements
www.finance.gov.ie
• Also SourceOECD
– OECD.stat
Slide 4

5. A word on data graphs
• all these done in Excel
• from the underlying data
• with a nod towards the graphic design
principles of Edward Tufte
• www.edwardtufte.com
• “The Visual Display of Quantitative
Information”
• Graphs as invitation to explore the data
Slide 5

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16. The 2008 likely outturn depends a lot on the Q4 tax revenue
See esp Income Tax, Corp Tax, Capital Gains Tax in 2007 in table below:
The Exchequer Returns for November 2008
(due first few days in December, will be closely watched)
! billions 2007 2008
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Excise 1.4 1.5 1.4 1.5 1.4 1.4 1.4 ?
Value-Added Tax 4.5 2.8 4.5 2.7 4.5 2.6 3.9 ?
Capital Gains Tax 0.9 0.1 0.1 1.9 0.5 0.1 0.1 ?
Stamps 0.9 0.8 0.8 0.7 0.5 0.4 0.4 ?
Income Tax 3.0 3.0 2.9 4.7 3.1 2.8 2.8 ?
Corporation Tax 0.9 0.6 0.8 4.1 0.8 0.6 0.7 ?
All taxes 11.8 9.0 10.6 15.8 11.1 8.0 9.4
Total to date 11.8 20.8 31.5 47.2 11.1 19.1 28.5
% of total 25.1 44.1 66.6 100.0 42.8
Slide 16

17. • By Q3 2007, the govt collected €31.5 billion:
• that was 66.6% of the total for the year (€47.2 billion)
• In Q3 2008, the govt had collected €28.5 billion
• If that turns out to be 66.6% of the total for 2008, that total
will be €42.8 billion
Slide 17