GOVERNMENT EXPENDITURE The main areas of government expenditure are:
• Social welfare (e.g. Jobseeker’s Benefit, Jobseeker’s Allowance, Illness Benefit, Maternity Benefit, Child Benefit and State Pension)
• Health • Education • Transport • Tourism • Agriculture • Public sector wages • Debt servicing.
We will learn more about national debt in chapter 32
GO i
Debt servicing is the amount of money that the government allocates for paying off national debt. It is a percentage of the overall budget.
Like an individual or household, the government does not always have enough money to spend on everything it wants. Therefore, it must decide what is most important and make choices. The government must carefully examine its choices and the impact those choices will have on society and the environment.
As we learned in chapter 3, the expenditure that is not chosen when financial choices are made is called the opportunity cost.
Example
The government can use €1 million to buy new medical equipment or teaching supplies. If it chooses medical equipment, the opportunity cost is the teaching supplies that it cannot buy.
TYPES OF GOVERNMENT INCOME AND EXENDITURE
As we learned in chapter 19, expenditure can be divided into capital expenditure and current expenditure. This is also true of income.
• Capital refers to one-off or long-term income and expenditure. • Current refers to everyday or regular income and expenditure.
