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The Financial Crisis in Ireland and Government Revenues

Author

Listed:
  • Hickey, Rónán

    (Central Bank of Ireland)

  • Smyth, Diarmaid

    (Central Bank of Ireland)

Abstract

This paper examines trends in government revenues during and after the financial crisis. On taxation, it highlights the strong increase in income tax receipts in recent years. Relying on stable sources of revenue — rather than cyclically sensitive ones — appears desirable from a public finance perspective and reduces a key vulnerability that developed in Ireland in the mid-2000s. There has also been a sharp increase in non-tax revenues since the crisis, partly due to measures introduced by the Government to assist the financial sector. Managing the transition to lower, more normal, non-tax revenues will be a challenge. This financial support has significantly added to the public debt ratio, the high level of which remains a key vulnerability for the economy. Accordingly there would appear to be a strong case that unexpected or windfall gains from these sources be used to exclusively reduce public debt.

Suggested Citation

  • Hickey, Rónán & Smyth, Diarmaid, 2015. "The Financial Crisis in Ireland and Government Revenues," Quarterly Bulletin Articles, Central Bank of Ireland, pages 60-71, October.
    • Handle: RePEc:cbi:qtbart:y:2015:m:10:p:60-71
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    File URL: https://centralbank.ie/docs/default-source/publications/quarterly-bulletins/qb-archive/2015/QB4-15/quarterly-bulletin-no-4-2015.pdf?sfvrsn=10#page=62
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    References listed on IDEAS

    as
    1. Stephen Cecchetti & Madhusudan Mohanty & Fabrizio Zampolli, 2011. "The real effects of debt," BIS Working Papers 352, Bank for International Settlements.
    2. Maurer, Henri & Grussenmeyer, Patrick, 2015. "Financial assistance measures in the euro area from 2008 to 2013: statistical framework and fiscal impact," Statistics Paper Series 07, European Central Bank.
    3. Diarmaid Addison-Smyth & Kieran McQuinn, 2010. "Quantifying Revenue Windfalls from the Irish Housing Market," The Economic and Social Review, Economic and Social Studies, vol. 41(2), pages 201-233.
    4. Grussenmeyer, Patrick & Maurer, Henri, 2015. "Financial assistance measures in the euro area from 2008 to 2013: statistical framework and fiscal impact," Statistics Paper Series 7, European Central Bank.
    5. Hickey, Rónán & Smyth, Diarmaid, 2015. "Government revenues in Ireland since the financial crisis," Economic Letters 07/EL/15, Central Bank of Ireland.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Gilles Mourre & Adriana Reut, 2019. "Non-tax revenue in the European Union: A source of fiscal risk?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 26(1), pages 198-223, February.

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