The estimated Government current budget for 2017 is as follows: Government Current Income €53,245m Government Current Expenditure €50,548m (i) Calculate the current budget surplus - Leaving Cert Economics - Question 6 - 2017

An example of government current income is:

• Direct tax revenue (e.g., income tax).

An example of government current expenditure is:

• Salaries of all state employees.

1. Increased Revenue: As the unemployment rate falls, more individuals are employed. This leads to an increase in Pay-As-You-Earn (PAYE) tax revenue as more people earn higher incomes. Additionally, businesses' profits can rise, increasing corporate tax receipts.

2. Reduced Expenditure on Social Welfare: With fewer individuals unemployed, the government will have to spend less on social welfare payments. This reduction in expenditure can positively impact the overall budget, allowing for potential increases in investment in services or infrastructure.

1. Increase in social welfare payments of €5 per week:

   • In Favor: This increase will improve the standard of living for recipients, helping them achieve a better quality of life.
   • Against: The increase may result in higher government expenditure, leading to potential issues with balancing the budget in future years.

2. Decrease in the rate of Deposit Interest Retention Tax (DIRT) from 45% to 39%:

   • In Favor: This reduction encourages savings as it leaves individuals with more disposable income, promoting wealth retention within the economy.
   • Against: This could be seen as inequitable, benefiting mainly wealthier individuals who tend to have larger savings, thus widening the gap between different social classes.