Thursday 18 January 2018

Government's definition of saving is too easy

THERE are many ways to understand the debate about the savings made by so-called public sector cuts.

It is a confusing topic and it is in the interests of many people to make it even more confusing, but the IMF's figures offer a simple way to understand the problem.

Those figures show that total pay and compensation for the public sector in 2010 was €18bn and the IMF projects the figure will fall to €17.8bn by 2017.

That means the Government is expected to save the princely sum of €200m by 2017.

The amount of income tax collected will rise from €11bn to €19bn over the same period.

That suggests that the Government expects to raise 40 times more from income tax hikes than public sector pay cuts.

So far, the Government is on track to do just that.

The monthly Exchequer figures show a relentless rise in spending on pay, while spending on capital projects that often benefit the private sector continues to decline.

The Government's definition of saving is simply too easy.

All of us 'save', using its definition every time we look in a shop window and decide not to buy whatever product catches our eye.

If only it were that simple.

Indo Business

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