45126-Invest. Qual-No111

Investment in QualityInternational ComparisonsThe level of public expenditure in Ireland and other EU countries isshown in Table 5.6. If expenditure is measured in terms of GDP, thelevel of expenditure in Ireland at 35.4 per cent in 2002 was thelowest in the EU. When measured as a share of GNP, 3 publicexpenditure in Ireland in 2002 at 42.5 per cent was the third lowestamong EU countries, with both the UK and Spain at 41.0 per centand 39.2 per cent respectively. 4 The share of total governmentexpenditure in the UK has expanded in recent years. Its share in2000 was 36.9 per cent of GDP while the Commission forecast isthat its share will increase to 41.7 per cent in 2004.Even when expressed as a percentage of GNP for Ireland, thismeasure is subject to a number of significant limitations. Publicexpenditure as a percentage of output or income is not necessarilyan indication of the resources actually devoted to the delivery ofpublic services and benefits. Total public expenditure includesinterest payments that are not available for the provision of publicservices. The level of national debt and interest payments in Irelandare relatively low. The second column in Table 5.6 shows the levelof non-interest general government expenditure. Total non-interestgeneral government expenditure in Ireland in 2002 was estimated at3. The main difference between GNP and GDP is the profits of foreignmultinationals with operations in Ireland. These profits are part of GDP but notGNP. To some extent these profits are part of the tax base as they are subject tocorporation tax. However, they are not part of the other tax bases thatconstitute most of the total tax base.4. The level of public expenditure as shown in Table 5.6 is higher than the figuresshown in Figure 5.1 from national sources. The level of public expenditure asestimated by the European Commission is higher than that shown by thebudgetary figures in Figure 5.1 as the budgetary figures refer to centralgovernment expenditure while the Commission figures refer to generalgovernment (central and local government). The Commission figures onpublic expenditure are close to but slightly higher than public expenditure asreported by the CSO in the national accounts. This is because of adjustmentsmade by in the Commission’s figures for reasons of international comparability.The largest single difference between the CSO and the Commissionfigures concerns the treatment of the imputed pension costs of public servants.The Eurostat figures include the estimated imputed costs of the future pensionentitlements of public servants, which are not included in the national figureson public expenditure.194