Ch30: Govt. Revenue + Expenditure

• Government Income:

  • Current - income received on a day to day basis. Ex) Taxation, lottery receipts, profits from state owned businesses (Aer Lingus)
  • Capital - income received on a one-off basis. Ex) selling a state owned company (Aer Lingus), borrowing from the World Bank
• Government Expenditure:

  • Current: expenditure that occurs on a day to day basis. Ex) Jobseekers Benefit, State Pension, wages for public sector employees (teacher, doctor), national debt interest
  • Capital: expenditure on one off items that will last a long period of time. Ex) New hospital, schools, ambulances, Gardai vehicles
• Government National Budget: consists of many ministers who draw up a budget for their department and how much they need to spend. This is shown to the Minister of Finance who decides how much to give to each department.
• When the government has a surplus budget, they can:

  • Pay off some of the national debt
  • Reduce taxes
  • Hire more Garda, teachers, doctors
  • Increase welfare payments - jobseekers benefit
• When the government has a deficit budget, they can

  • Increase taxes
  • Borrow from the World Bank
  • Sell the state-owned company, ex) Aer Lingus. This process is knows as privatisation.