The current crisis engulfing Ireland has generated an unprecedented level of interest in the budgetary process and on how we choose to tax and spend. As a response to this increasing interest in public expenditure, TASC will be generating an ongoing series of resources to ‘explain’ public spending in Ireland. The first outputs in this series are a pair of discussion papers as well as an online tool.

The interactive online tool provides detailed information showing where we as a society are spending our resources. It is not only possible to disaggregate spending by functional type - e.g. education and health - but also to see how much money goes to very specific areas. The tool will be updated regularly, and will show the changes to the various spending areas as a result of budgetary decision on December 7th and on future dates.
The first discussion paper examines the rationales for, and the constraints on, public spending. The key point is that the level and type of public spending are ultimately political choices subject to the parameters of prevailing resource constraints. This is particularly resonant in light of the ongoing debates surrounding the EU/IMF ‘bailout’ of Ireland.

The second discussion paper focuses on the composition of public spending in Ireland. There is a body of evidence that suggests that the composition of spending may be more important for economic growth than the overall level, although there does appear to be evidence that a positive association exists between income equality and levels of public spending. However, the nature of the association is uncertain and will be investigated in a future discussion paper. The composition of public spending remained very consistent between 1995 and 2008. Eight of the ten functional areas of spending remained in consistent proportions throughout the period. Health spending rose as a proportion of overall spending, and spending on general public services declined as the debt interest burden decreased.

The discussion papers are not meant to be the last word on public spending and are designed to invite suggestions and criticisms from readers. The authors invite all suggestions and criticisms as part of TASC’s ongoing mission to improve the quality of publically available information. All suggestions will be responded to and taken into consideration in future iterations of the outputs. Future discussion papers, including more technical papers, will be released in 2011.

For further information on any aspect of this project, please contact::
Tom McDonnell
Policy Analyst
tmcdonnell@tascnet.ie
01 6169050