Ireland's Spending on Education: An International Comparison

Ireland has been steadily declining in government spending on education as a percentage of GDP in recent years. In 2008, Ireland spent 4.9% of its GDP on education, but by 2020, that number had fallen to 3.1%. This decline is in stark contrast to the OECD average, which has remained relatively stable at around 4.9% over the same period.

Data from: Our World in Data

There are a number of factors that have contributed to Ireland's declining education spending:

• The financial crisis of 2008 had a significant impact on the Irish economy, and government spending on all fronts was reduced as a result.
• In addition, Ireland has seen a significant increase in the number of students attending third level education in recent years, which has put a strain on resources.

The decline in government spending on education has had a number of negative consequences:

• First, it has led to larger class sizes and less access to resources for students. 
• Second, it has made it more difficult for schools to attract and retain high-quality teachers.
• Third, it has contributed to a decline in the quality of education in Ireland.

Ireland's declining education spending is a matter of concern for many people. There is a growing consensus that Ireland needs to invest more in education in order to remain competitive in the global economy. The government has made some commitments to increasing education spending in recent years, but it remains to be seen whether these commitments will be enough to reverse the trend.

In terms of how Ireland compares with other wealthy countries in this regard, Ireland is one of the lowest spenders on education as a percentage of GDP. Only Chile, Mexico, and Turkey spend less on education as a percentage of GDP than Ireland. The United States, Canada, the United Kingdom, and most other European countries spend significantly more on education as a percentage of GDP than Ireland.

If Ireland wants to remain competitive in the global economy, it needs to invest more in education. The government needs to make a long-term commitment to increasing education spending and to ensuring that all students have access to a high-quality education.

Ireland's Current Budget since 2019

Ireland has experienced a budget surplus over the past four years (2019 - 2023), with the government running a record budget surplus of €8 billion in 2022. This follows two years of successive deficits (-€6.8 billion in 2021 and -€18.7 billion). 

The increase in spending was “mainly due to increased compensation of employees and intermediate consumption, with reductions in the level of subsidies in the year”. The budgetary largesse is entirely driven by windfall corporate tax receipts, which generated €22.6 billion last year (2022) and are expected to generate €24 billion this year. This is approximately €5,000 for every man, woman, and child in the country. 

The government's budget surplus or general government balance is expected to be almost double that at €10 billion this year.

The surplus is predicted to continue, with the Republic of Ireland predicted to have a €65.2bn budget surplus by 2027. In its latest Stability Programme Update, the Department of Finance projected a budget surplus of €10 billion for this year, rising to €16 billion in 2024, on the back of a further surge in corporate tax. Ireland’s general government budget balance registered a surplus of 1.6% of GDP in 2022, and in 2023 and 2024, government budget surpluses are forecast to widen to 1.7% and 2.2% of GDP, respectively.

The surplus is largely due to the windfall corporate tax receipts, which have been generated by the activity of multinational companies. The rebound in private consumption and the continued solid performance of net exports have also contributed to the surplus. Private consumption, a stable driver of domestic growth, is expected to remain solid thanks to increasing household income and employment. While retail sales and services grew only mildly in early 2023, consumer sentiment in Ireland appears resilient to cost-of-living pressures. The high savings rate is expected to decrease gradually but remain far above the historical average.