government expenditure


Also found in: Acronyms.

government (public) expenditure

the current spending and INVESTMENT by central government and local authorities on the provision of SOCIAL GOODS and services (health, education, defence, roads, etc.), marketed goods and services (coal, postal services, etc.) and TRANSFER PAYMENTS (JOBSEEKERS ALLOWANCE, state PENSIONS, etc.). In the CIRCULAR FLOW OF INCOME MODEL, transfer payments are excluded from government spending because these are not made in return for productive services (that is, add to total output) but merely transfer taxation receipts from one household to another.

Government expenditure is financed by TAXATION and by borrowing (see PUBLIC SECTOR BORROWING REQUIREMENT).

Government expenditure is an important component of AGGREGATE DEMAND in the circular flow of income/expenditure. In 2003, government expenditure accounted for 15% of gross final expenditure (GFE) on domestically produced output. (GFE minus imports = GROSS DOMESTIC PRODUCT. See Fig. 133 (b) , NATIONAL INCOME ACCOUNTS.

Government expenditure is used as an instrument of FISCAL POLICY in regulating the level of spending in the economy. However, short-term changes in government expenditure may be difficult to achieve because of administrative and political difficulties, especially where cuts in expenditure are being made with a view to contracting aggregate demand. For example, short-term cuts can be difficult to achieve in health, education, etc., expenditures, given the labour-intensive nature of these activities, without heavy redundancies and disruption of public services; while cuts in transfer payments to poorer members of the community are politically unpopular. Furthermore, where the brunt of changes fall upon public investment expenditures, this can severely disrupt long-term investment projects while cuts serve to deplete the social infrastructure. In addition, where government expenditure includes spending on goods and services bought in from businesses, changes can have dramatic effects on the prosperity of the private sector. See SOCIAL PRODUCT, BUDGET ( GOVERNMENT), COLLECTIVE PRODUCTS, CROWDING-OUT EFFECT.

References in periodicals archive ?
Moreover, our defence budget is not the largest expenditure head and is in fact much lower than civil government expenditure at the federal level, even after taking into account defence spending booked outside defence affairs.
In a separate letter, he further asked to allocate specific time for discussing the report of the auditor general on the provincial government expenditures before budget proceedings.
In both zones the government expenditure ratio decreased between 2017 and 2018, while the government revenue ratio increased.
Although salaries tax has seen broadening base with more people being brought into the tax net, its average contribution to government revenue has declined and ageing population further poses concerns of whether salaries tax could remain a large revenue source to meet government expenditure.
government expenditures accounting for 3.3 percent of gross domestic product (GDP) in 1930 compared to 20.5 percent of GDP in 2017.
The legislators said government expenditures can directly affect employment rate as projects can generate several jobs.
Lucknow (Uttar Pradesh) [India], Sep 19 ( ANI ): Chief Minister Yogi Adityanath-led Uttar Pradesh Government has implemented strict norms to curb government expenditure.
Real government expenditure in 2017 fell by -7.99% over the preceding year, mainly caused by the decline in collective government consumption (a 10.41% decline rate in real terms).
In the year 2009, expenditure on tertiary education in India was 36.45 per cent of the total general government expenditure on education.
The Bill was necessary following the cost-centre revision made in government expenditure, as well as, fiscal adjustment measures undertaken to reduce the country's debt that had ballooned to RM1 trillion under the previous government.
Total Government expenditure in Cyprus for 2016 reached 38.6 per cent of GDP, according toEurostat, had the third lowest expenditure share on pensions at 6.2 per cent while Greece had the highest at 16 per cent.
Total government expenditure in the euro area stood at 46.5 percent of GDP, a decrease compared to the previous quarter (47.1 percent).

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