An Analysis of Government Revenue and Expenditure in ... - TARA

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expenditure although considerable non-monetary benefits to private
motorists resulted from such constructional work. It was evident
that the effect on national output of the construction of new roads
would vary from country to country but the only reasonable way of
compiling statistics was to include all expenditure on new roads in
capital formation for every country. It would, of course, be
desirable to break down capital formation into different categories
so that the question of the expenditure on capital assets in relation
to future productivity could be assessed. It would appear to be
the task of economists to provide a basis for distinguishing
" productive " and " non-productive " capital assets.
In reply to Mr. Coffey, Mr. Broderick agreed that the presentation
of government accounts for national income purposes did not
in any way supplant the necessity for the provision of the
traditional accounts.
Mr. Garret Fitzgerald had enquired about depreciation. In the
official national accounts an allowance for government depreciation
was made. This covered depreciation on buildings. Regarding
defence expenditure, this expenditure was treated as current
because no benefit to the community in the form of welfare resulted
therefrom. There was no addition to national wealth as would result
from the construction of a new road.
With regard to Dr. Smith 7 s observations on rates, it did not seem
to matter much whether rates were considered direct or indirect
taxes. Since they were allowed as an expense in computing business
profits it seemed more appropriate, however, to regard them as
indirect. Also the payment of rates is associated with the use and
occupation of premises. It would not be true that the transfer of
rates from indirect to direct taxes would bring Ireland more into
line with other countries in the proportion of direct taxation
collected, since such a transfer would also have to be made in
respect of the figures for the other countries.