Aidan Kane's Lecture 2008 11 06 Ul Fiscal Policy.Ppt

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Aidan Kane's Lecture 2008 11 06 Ul Fiscal Policy.Ppt

  1. 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. 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. 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. 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. 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. 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. 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

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