A chara, – Dan O’Brien’s article (Business This Week, October 5th) includes a graph showing Irish public spending grew by 163 per cent between 1997-2007, ie, more than three times the EU average. O’Brien presents this rate of growth as excessive and wasteful.
What he fails to point out is that Ireland’s GDP grew at exactly the same rate over the period in question, so that by 2007, government expenditure as a proportion of GDP remained the same, at 36.5 per cent, as in 1997.
What O’Brien also fails to point out is that, in 1997, Irish government spending as a proportion of GDP was well below the EU average of 48.1 per cent and was the 24th lowest of the EU’s 27 member states. By 2007 Ireland had risen to the 22nd lowest position, still way below the EU average of 45.6 per cent.
While Irish government spending may be wasteful in many ways, the fact is that we have been doing a lot less of it than most other European countries, as reflected in the poorer quality of public services. And for those who fret about the impact of government spending on economic performance, it may be noted that the five top EU countries in terms of spending as a proportion of GDP are all in the top 10 in terms of per capita GDP, with Denmark occupying the top position in both lists. – Is mise,