Government Revenue and Expenditure

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Presentation transcript:

Government Revenue and Expenditure LO 3.4

The National Budget The national budget details Ireland’s revenue and expenditure for the year. It is published in October each year by the Minister of Finance Paschal Donohoe (2019). The Minister of Finance asks all other Ministers (e.g. Education, Health) to submit their estimates (how much money their department will need) and then presents the actual budget.

Capital Income Capital income is money the Government receives occasionally or one time only. This is usually in the form of EU grants or income from the sale of valuable assets including land, buildings and State owned companies. Sources of Capital Government Income Examples EU Grants Budget Surplus from last year Sale of State Assets Dividends from state companies Borrowings

State Owned Companies State Owned Companies Formed by the Dáil and owned by the state with a board of directors appointed to run them. When a government sells a State- Owned company it is called privatisation. If the government takes over a company it is called nationalisation.

Current Income Current income is money that the Government receives regularly. This revenue comes mainly from taxes and is the most important source of income for the Government. Sources of Current Government Income Examples PAYE VAT Corporation Tax DIRT - Deposit Interest Retention Tax Excise Duties (Taxes on petrol, alcohol) National Lottery

Capital Expenditure Capital expenditure is money the Government spends occasionally or one time only. Sources of Capital Government Expenditure Examples Building new schools Building new hospital Buying long term assets for state departments- e.g. new computer for a school

Current Expenditure Current expenditure is money that the Government spends regularly. Sources of Current Government Expenditure Examples Social Welfare Payments Payments for the running of schools and other departments- e.g. light + heat Government salaries Day to day running of the health service Debt Servicing –payment of interest on the national debt

2018 Junior Certificate HL Questions

Budget Surplus Budget Deficit Reduce tax rates such as PAYE- people will have more money to spend Increase taxes Improve Infrastructure such as roads Decrease spending Increase spending on public services such as schools and hospitals Borrow from ECB

Task You will design a three-fold information leaflet, aimed at a particular group of people, which will help them understand the budget. Your leaflet should be directed at one of the following groups: • Single worker • Pensioner • Families You will assess how Budget 2018 has affected your chosen group. You will work individually. This activity is based on real-life data from Budget 2018.

Success Criteria SC1: Explain capital and current expenditure and income, using examples. SC2: Explain what a national budget is SC3: Identify and assess what information their chosen group will want to know about Budget 2018 SC4: Use images or visual appropriate to their chosen group SC5: Use language appropriate to their chosen group SC6: Explain the benefits of this budget for their chosen group