Background Notes

Introduction

This release comprises the latest official publication by CSO of quarterly Government Finance Statistics (GFS) for the period Q1 2017 to Q4 2020.

The data published in this series are consistent with General Government Deficit and Debt levels reported at end April 2021 under the EU regulation governing the Excessive Deficit Procedure. Government accounts are compiled in the EU according to the European System of National Accounts framework ESA 2010.

The tables provide detailed revenue, expenditure and balance sheet data for general government. These data are also available on CSO PxStat .

The full suite of GFS tables are also available on the CSO Website. 

Data for all EU Member States are available on Eurostat's database.

Transactions of note Q4 2020 

COVID-19

A preliminary estimate of the full year impact of COVID-19 supports on expenditure was published in the annual Government Finance Statistics, Table A. See GFS annual release for details.

Changes to the Register of Public Bodies.

Approved Housing Bodies

As of March 2021, an additional 43 Approved Housing Bodies (AHBs) have been reclassified to the government sector (S.13) from the non-profit institutions serving households sector (S.15). While these bodies were reviewed as they are listed as Tier 2 AHBs, they are involved in other activities, for example, disability service provision, and are in receipt of grants from a number of government departments. Hence, 30 AHBs are classified in the local government sector (S.1313) and 13 bodies classified in the central government sector (S.1311). Eurostat have been notified of the individual AHBs and multi-functional bodies and they will be listed on the Register of Public Bodies on 21 April 2021.

The inclusion of these AHBs into S.13 means that their income, expenditure, assets and liabilities are added to general government. However, any income received from local and central government subsectors has to be consolidated. Likewise, expenditure which has a counterparty in local or central government has been consolidated as appropriate. Only additional income from other sectors of the economy has been added to government income (e.g. receipt of rent from tenants). The main additional expenditure relates to the compensation of employees, intermediate consumption and capital formation. 

The impact of the reclassification is included in the time series beginning in 2014 (aligning with ESA 2010 implementation).

Insurance Compensation Fund 

A review of the Insurance Compensation Fund (ICF) by Government Accounts Classifications concluded that the ICF should be included in central government sector (S.1311) from 2014 (aligning with ESA 2010 implementation). This has been implemented for the March 2021 EDP notification. The ICF will be listed as an Extra Budgetary Fund under the Department of Finance in the Register of Public Bodies 2020.

Movements of note in the balance sheet, Q4 2020

The value of the State's assets in Equity and Investment Fund Shares (AF.5, Table 6) stood at €33.7 bn, representing a net year-on-year fall of €3.7 bn since Q4 2019. Over this period the decrease in value was composed of a reduction in holdings of these assets of €1.3 bn (Table 5), together with valuation losses due to market fluctuations of €2.4 bn (Tables 5 and 6). Market losses in the value of shares held by the State in Irish banks were offset over this four quarter period by holding gains across other assets in this investment class.

Estimated Pension Liabilities

The memo item, Estimated pension liabilities of government (Tables 2 and 6), has been updated to reflect the data in the supplementary table on accrued-to-date pension entitlements in social insurance (Table 29) transmitted to Eurostat in December 2020 with reference to 2018 data. The Irish data is available here on the CSO website. These estimates are updated every three years in line with Eurostat requirements (Regulation (EU) No 549/2013). By their nature, they are therefore point-in-time estimates. The main difference between these latest estimates and the previous estimates is the discount rate used. The discount rate used for the previous 2015 estimates was 5% in nominal terms (3% in real terms). For the 2018 data, a discount rate of 4% nominal (2% real) was used. The discount rate has a significant impact on the scale of the pension liability and for this reason the data in respect of 2018 is not directly comparable with data in the 2015 publication.

GDP figures used in publication

The GDP figures used in this publication is based on the Quarterly National Accounts released on 5 March 2021.

Population estimates used in publication

The population estimates used in calculating the debt per capita data in Figure 3 are the previous year's mid-April estimates of population except for the year 2017 where the 2016 census of population figure is used (see PXStat table PEA15: Annual Population Change by Component and Year).

Government Finance Statistics – concepts and definitions

GFS form the basis for fiscal monitoring in Europe, in particular in relation to the Excessive Deficit Procedure (EDP).

In addition to the legally binding accounting rules set out in ESA2010 the Manual on Government Debt and Deficit (MGDD) provides further implementation guidance in the context of GFS.

EU Member States are required to report government deficit/surplus and debt data biannually under the EDP - before 1 April and 1 October in year N, for years N-4 to N-1 calendar years, as well as a forecast for the current year. The data are reported in harmonised tables, which provide a consistent framework for the presentation of this data by Member States. The tables provide a structure for linking national budgetary aggregates with government deficit and debt.

In addition to the EDP transmission programme, detailed statistics on government revenue and expenditure are also provided to Eurostat under the ESA transmission programme. For quarterly data the main tables reported are:

Table 0801 Quarterly non-financial accounts by sector

Table 2500 Quarterly short term statistics (revenue and expenditure) for general government

Table 2700 Quarterly financial accounts for general government

Table 2800 Quarterly government debt (Maastricht debt) for general government

These data are available on the Eurostat website.

Definition of general government and its subsectors

The general government sector of the economy, is defined in ESA2010 paragraph 2.111: as “institutional units which are non-market producers whose output is intended for individual and collective consumption, and are financed by compulsory payments made by units belonging to other sectors, and institutional units principally engaged in the redistribution of national income and wealth.” General government comprises the sub-sectors central government (S.1311), state government (S.1312 – which does not apply in Ireland), local government (S.1313), and social security funds (S.1314 – which does not apply in Ireland)

General government balance is the standard European measure of the fiscal balance, which is used to monitor compliance with the Stability and Growth Pact obligations.

This measure is by definition equal to both Total Revenue (TR) less Total Expenditure (TE), and Net Acquisition of Financial Assets less Net Incurrence of Liabilities as shown in the GFS release.

A listing of some of the main items included in this release is shown below.

General government gross debt (GG debt) is defined in the EU regulations implementing the Maastricht Treaty as the gross debt liabilities of the consolidated general government sector, at nominal value.

‘Gross’ means that the value of any financial assets held by general government cannot be deducted from the GG debt. In Ireland’s case, this means that the liquid assets which are deducted from the ‘Gross’ national debt in arriving at the audited national debt cannot be deducted from the GG debt.

‘Debt liabilities’ are defined as the ESA 2010 categories AF.2 (Currency and deposits), AF.3 (Debt securities), and AF.4 (Loans).

This definition excludes liabilities in derivatives, equity liabilities, pension and insurance liabilities and accounts payable.

‘Consolidated’ means that any money owed by one entity within general government to another is excluded from the total GG Debt.

‘Nominal value’ is defined in the governing regulation as face value. If debt is sold at a discount, it is the undiscounted value of the instrument, rather than the amount actually received, that is shown in the GG debt. In other statistical contexts, ‘nominal value’ means face value plus any interest accrued but not paid; however, such interest is excluded from GG Debt by definition.

General government net debt is a measure produced in accordance with the methodology of the IMF/World Bank Public Sector Debt Statistics Guide, by subtracting from the GG gross debt figure the value of the financial assets corresponding to the categories of financial liabilities which comprise GG gross debt.

General government net worth is calculated as the sum of financial and non-financial assets of general government less financial liabilities.

Detailed codes and technical definitions can be seen in the ESA 2010 manual.

A listing of some of the main items included in this release is shown below.

Main components of general government expenditure and revenue

P.2       Intermediate consumption – value of goods and services used in the process of production, excluding fixed assets

P.5       Gross capital formation

            P.51g   Gross fixed capital formation - acquisitions, less disposals, of fixed assets during a given period plus certain additions to the value of non-produced assets realised by productive activity. Fixed assets are tangible or intangible assets produced as outputs from processes of production that are themselves used repeatedly, or continuously, in processes of production for more than one year

            P.51c   Consumption of fixed capital - the amount of fixed assets used up, during the period under consideration, as a result of normal wear and tear and foreseeable obsolescence, including a provision for losses of fixed assets as a result of accidental damage which can be insured against.

P.52     Changes in inventories

P.53     Acquisitions less disposals of valuables

D.1      Compensation of employees – the total remuneration of government employees

D.21    Taxes on products are taxes that are payable per unit of a given good or service produced or transacted. Included in this is customs and excise taxes and VAT. To accrue this data the cash receipts are time adjusted. Customs and excise taxes are time adjusted by 1 month and VAT is time adjusted by 2 months. For example Q1 VAT is March, April, May cash receipts.

D.29    Other taxes on production (payable) all taxes that enterprises incur as a result of engaging in production, independently of the quantity or value of the goods and services produced or sold. These include taxes on use or ownership of land or buildings, taxes on use of fixed assets, taxes on total wage bill and payroll, taxes on international transactions related to production.

D.3      Subsidies (payable) - current unrequited payments which general government or the institutions of the European Union make to resident producers, with the objective of influencing their levels of production, their prices or the remuneration of the factors of production

D.4      Property income accrues when the owners of financial assets and natural resources put them at the disposal of other units of the economy. The income payable for the use of financial assets is called investment income, while that payable for the use of a natural resource is called rent. Property income is the sum of investment income and rent.

           D.41    Interest receivable by the owners of a financial asset for putting it at the disposal of another institutional unit - applies to deposits (AF.2), debt securities (AF.3), loans (AF.4) and other accounts payable (AF.8)

           D.42    Dividends receivable by the owners of share equities. Dividends exclude "super dividends" which arise where the dividend paid is large relative to the recent level of dividends and earnings. Super dividends are recorded as withdrawal of equity (F.5). This arises, for example, in the case of dividends paid by the Central Bank in 2015.

           D.45    Rent of a natural resource – income receivable by the owner of a natural resource for putting the resource at the disposal of another party.

D.5      Current taxes on income, wealth, etc., (payable) - all compulsory, unrequited payments, in cash or in kind, levied periodically by general government and by the rest of the world on the income and wealth of units in the economy, and some periodic taxes which are assessed neither on income nor wealth

D.6      Social contributions - transfers to households, in cash or in kind, intended to relieve them from the financial burden of a number of risks or needs.

D.7      Other current transfers – includes VAT and GNI based EU budget contributions, current transfers between subsectors of government, current international co-operation and current transfers to households and non-profit institutions.

D.9      Capital transfers - involve the acquisition or disposal of an asset, or assets, by at least one of the parties to the transaction.  Includes capital taxes and investment grants.

 P.1       Total output of Government is equal to market output, own account capital formation, and non-market output (i.e. the sum of D.1+P.2+P51c). The market output referred to in this publication is the imputed market value of social housing rented dwellings. See Table 3.

P.3        Final consumption expenditure of Government is equal to the total of its output (P.1) plus the expenditure on products/services supplied to households via market producers minus the sales of goods and services (at both market and non-market prices). This is made up of individual non-market services plus collective non-market services (P.31 and P.32). See Table 4.  

Categories of Financial Flows

F.1       Monetary gold and special drawing rights (SDRs)

            F.11     Monetary gold

            F.12     Special drawing rights (SDRs)

F.2       Currency and deposits

            F.21     Currency

            F.22     Transferable deposits

            F.29     Other deposits

F.3       Debt securities

            F.31     Short-term

            F.32     Long-term

F.4       Loans

            F.41 - Short-term loans

            F.42 - Long-term loans

F.5       Equity and investment fund shares

            F.51 Equity

            F.52 Investment fund shares/units

F.6       Insurance pension and standardised guarantee schemes

F.7       Financial derivatives and employee stock options

            F.71     Financial derivatives

            F.72     Employee stock options

F.8       Other accounts receivable/payable

            F.81     Trade credits and advances

            F.89     Other trade credits

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