GOVERNMENT BUDGET AND FINANCES

Question	Answer
BUDGET TIP	Honohan warned the Minister about the dangers of basing his spending plans for next year on tax revenues which may turn out to be windfall (once-off) gains.
BUDGET TIP 2	BUDGETS always need careful monitoring to ensure that a massive gap between tax and spending doesn’t suddenly open up once again requiring another bout of savage retrenchment (cut-back) measures.
budget tip 3 (see tip 1)	The Revenue Commissioners told the Government a surge in corporation tax payments recorded in October’s exchequer returns was the result of strong trading conditions rather than one-off factors. (Irish Times, Nov 15)
monetary policy	actions taken by central banks that influence supply of money, interest rates & availability of credit
fiscal policy	government actions around their spending (expenditure) and tax policies (revenue)
current spending	monies spent on day-to-day items, e.g. public servants/employees' wages; social welfare payments
capital spending	monies set aside for infrastructure necessary for a productive economy/social good, such as schools, hospitals, road-building
current budget deficit	day-to-day spending is greater than current govt. tax revenue
current budget surplus	govt revenue exceeds current spending
balanced current budget	day-to-day spending = govt. revenue
inflationary budget	govt spending increasing or taxation is decreasing - the govt is putting more money into the economy (Budget 2016)
deflationary budget	govt. spending decreasing and/or taxation increasing
neutral budget	neither inflationary or deflationary - ie won't be any danger of causing overheating ie too much money racing around economy nor any danger of dampening consumer activity in the economy
revenue buoyancy	govt revenue/income/tax returns have proven to be better than what was expected. {this was certainly the case for 2015 across income tax, VAT & corporation tax)
Exchequer borrowing requirement	govt borrowing to finance a current (day-to-day) deficit and borrowing for capital (infrastructure)purposes
Public sector borrowing requirement	exchequer borrowing + borrowing for semi-states (ESB) and local authorities(Tipp Cty Cncl)
National debt	debt built up to date and outstanding debt
debt/gdp	debt as a percentage of gdp
National Treasury Management Agency (NTMA)	...is the treasury of the govt and manages assets & liabilities of govt as well as Nat Pension Reserve Fund, NAMA etc sells government bonds(borrows for exchequrer)
debt/GDP ratio	...is calculated by dividing general govt debt by GDP EU sets a 60% limit. Govt have exceeded this greatly over the last while; it is declining presently.
Progressive Tax	tax that takes more tax as the person's income increases, e.g. PAYE, capital gains tax
regressive tax	a tax that does not take into account people's ability to pay. For example VAT or parking charges are a greater burden to a poorer person than they are to a richer person
Canons of taxation	Equity, Economy, Certainty & Convenience
Equity	Are taxes fair? Do they fulfil the role of wealth redistribution? {think progressive v regressive}
Economy	does the tax collect more than it costs to administer and collect the tax. {NB Irish Water has come in for criticism for failing in this regard - although this is a very politically charged issue) Revenue Commissioners are highly efficient.
Certainty	Tax revenue should be predictable thus aiding planning ahead by the govt
convenience	Taxes should not prove inconvenient to pay/collect
ad valorem tax	more tax is paid as the value of the goods increase eg VAT amount is greater on a computer than it is on a calculator. Stamp duty increases as house prices do
Taxation as a tool of the govt.	increase tax to discourage smoking levies on plastic bags to help envir't. tax breaks to encourage investment build infrastructure

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GOVERNMENT BUDGET AND FINANCES

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	Created by John O'Driscoll about 9 years ago