asked the Taoiseach if he will state the sources from which the following statistics are computed each year:—gross capital formation, net capital formation, national capital formation and current savings.
Ceisteanna—Questions. Oral Answers. - Capital Formation and Savings.
2.
The estimates of gross domestic capital formation are compiled mainly from data collected in the Censuses of Industrial Production and Distribution, the Agricultural Census and Trade Returns. Estimates of the capital expenditure on roads, obtained from the Department of Local Government, are also included. The estimates are obtained by aggregating estimates of the value of home-produced capital goods, of the value of imported capital goods ready for use and of the value of physical changes in stocks, including livestock on farms.
Net domestic capital formation differs from gross domestic capital formation by the value of the provision for depreciation. The sources used in estimating depreciation are data in the Census of Industrial Production returns and import trade statistics, the income tax wear and tear and obsolescence allowances prepared by the Revenue Commissioners, and data in Government accounts for payments to sinking funds, etc. Estimates of depreciation are necessarily not as reliable as the estimates of gross domestic capital formation and, therefore, the estimates of net domestic capital formation, which depend on the depreciation allowances taken, are less reliable than the gross figures.
Gross national capital formation differs from gross domestic capital formation by net foreign investment (or disinvestment) which is the surplus (or deficit) on the Balance of International Payments.
The total of current savings, provision for depreciation and net foreign disinvestment is equated to the value of gross domestic capital formation. Current savings is, therefore, a residual estimate and is affected by any errors of estimation in the other aggregates.
Arising out of the Taoiseach's reply, I should like to ask is there any living creature claiming to be rational who has any clear understanding of what is meant by gross capital formation, net capital formation or national capital formation, or would I be right in believing that this is largely a phantasm of the statistician's mind?
The answer is "Yes".
That is a very courageous reply on the part of the Taoiseach.