asked the Minister for Finance if he will state the proportion of estimated State capital expenditure in the current year that can be regarded as productive, taking productive expenditure as meaning expenditure yielding a direct return equivalent to the interest charge on the relevant borrowing.
Ceisteanna—Questions. Oral Answers. - Productive State Expenditure.
As may be seen from Table IV of the tables issued in connection with the Financial Statement, 1957, the estimated amount of capital to be provided from the Exchequer for the purposes of the public capital programme in the current financial year was £38.57 million. The productivity of State capital expenditure is, however, a difficult question to decide even in relation to past expenditure. The determining factor cannot be simply whether or not a direct financial return equivalent to the interest charge on the relevant borrowing is received by the Exchequer. This in fact applies to about one-third of the current year's outlay. In some cases, however (e.g., Irish Shipping), the return may be earned by the investment but be applied to other agreed purposes (e.g., the purchase of new ships). In other cases (e.g., afforestation) the question of the adequacy of the return can only be finally determined many years after the investment is made. Apart from this, public capital expenditure may properly be described as productive if it yields an adequate return to the national economy as a whole, i.e., if it causes an increase in national income resulting in an increase in revenue equivalent to the interest charge on the relevant borrowing. On this wider basis, a considerable proportion of public capital expenditure is of a productive character.