The annual report of the Comptroller and Auditor General contains lots of useful information. However, one criticism I would level at the report is its use of an accounting framework that differs from the General Government Budget that we report to Brussels.
The report states that “Overall State expenditure in 2010 was €53.8 billion, a reduction of 9.5% on the 2009 level” figures that are being widely reported in the news today. The report also lists “Total Receipts” at €35.6 billion up from €34.7 billion the year before.
However, if one looks at the more comprehensive accounts that we provide to Brussels—and which are used as the basis for reporting and compliance with our EU-IMF programme—one finds (page 49) that total expenditure by the Irish government last year was €103.2 billion while total revenues were €53.2 billion.
The €103.2 billion expenditure figure includes €30.8 billion for promissory notes, and one can understand that there are various possible accounting treatments for these notes. However, that still leaves non-promissory-note spending at €72.4 billion, almost twenty billion higher than reported by the C&AG. So despite the use of “overall” and “total”, it’s pretty clear that these are not overall totals at all.
Some of these differences are accounted for by the exclusion of capital spending and on the tax side there’s differing treatment of PRSI contributions. I could go on listing other differences but, frankly, who cares? The GGB figures provided to Brussels are the most comprehensive indicators of our fiscal position and they are being closely watched by the EU and IMF.
As I’ve written about before, these kinds of figures also mislead the public about key magnitudes, thus undermining public debate about fiscal options. For example, you will hear various expenditure items compared against a total tax revenue figure of €31.7 billion—those who’ve read the C&AG report will think total revenue was €35.6 billion. This usually ends up distorting the actual fraction of revenues devoted to these expenditures.