Officials from the Department of Finance appeared before the Public Accounts Committee today to answer questions about the state of the economy. Here are some of the things we learned:
We're the second most indebted country in the world
Not an accolade we wanted, but according to John McCarthy, the chief economist at the Department of Finance, in hard cash terms Government debt stands at €201 billion. That’s between €42,000 - €44,000 for every person in the State. That makes us number two in the world behind Japan. By the way - that doesn't include personal debt like mortgage or credit card debt.
There’s no money in the 'rainy day fund'
Leo Varadkar promised to use the so-called "rainy day fund" to boost capital spending. The only thing is, there is no rainy day fund. Officials told the PAC that there is a plan to put €1 billion into the fund in 2019, 2020 and 2021. But right now the value of the fund is "zero." The PAC was told that the fund is currently being reviewed, and there would be more details in the summer economic statement.
The Summer Economic Statement is coming
This will provide an update of the state of play in the Irish economy, and will provide us with the first signal of intent from the new Taoiseach and the new Minister for Finance.
We have a new way of measuring economic growth
In 2015, when revised annual GDP data showed the Irish economy had grown by 26%, it was branded "leprechaun economics" by Paul Krugman. Officials at the Department of Finance sort of agreed, and they've told the PAC today that this Friday we will have a new way of measuring economic growth. It's called GNI star (or GNI*) and strips out distortions caused by multinationals. The only thing is, GDP will still be the measurement used when Ireland reports to international bodies.
Cutting the marginal rate of tax below 50% - would be tax cut for top earners
The head of the Department of Finance Derek Moran was quizzed on the effect of reducing the marginal rate of tax. Who would it benefit? Sinn Féin’s David Cullinane pointed out that only 14.3% of earners pay more than 50% tax. He asked: "If we were to reduce the marginal rate of tax below 50%, what we're doing then is giving a tax cut to the top 14.3% of income earners - would that be correct? Mr Moran replied, "yes".