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Outline how the Irish government could use its expenditure policies to support businesses in Ireland - Leaving Cert Business - Question C - 2012
Question C
Outline how the Irish government could use its expenditure policies to support businesses in Ireland. Use examples to illustrate your answer.
Worked Solution & Example Answer:Outline how the Irish government could use its expenditure policies to support businesses in Ireland - Leaving Cert Business - Question C - 2012
Step 1
Increase capital expenditure
Answer
The Irish government could enhance its capital expenditure on infrastructure, such as schools and hospitals. This strategy will not only create jobs but also boost consumer demand, thereby increasing business sales.
For example, by constructing new schools or hospitals, the government can create contracts and sales opportunities for local businesses. This not only helps the businesses directly but also employs local residents, thus further stimulating the local economy.
Step 2
Government State agencies
Answer
The government can utilize a network of state agencies that offer various forms of support to businesses, including advice, training, and financial assistance.
Examples include:
- Fáilte Ireland: This agency promotes tourism and aids businesses in the travel sector.
- Enterprise Ireland: It provides grants aimed at marketing and R&D, helping businesses innovate.
- SOLAS: Offers training solutions for workers, ensuring a skilled workforce is available. These agencies play a crucial role in promoting enterprise growth, directly benefiting local businesses.
Step 3
Increased current expenditure on public sector wages/social welfare
Answer
By increasing expenditures for public sector wages through national wage agreements, the government can create a positive economic ripple effect. Higher wages for public sector employees increase their disposable income, which can then be spent in the local economy, supporting businesses.
For instance, if the government raises salaries for teachers and nurses, this increase in disposable income would likely lead to increased spending in local shops and services, effectively stimulating business growth.
Step 4
Government investment in Education and Training
Answer
Investing in education and training is vital for ensuring a skilled workforce. The government may expand programs that support third-level education and training organizations like SOLAS, which aid in upskilling workers.
This can include providing training programs that help individuals re-enter the labor market. Enhanced education will supply businesses with a readily available skilled workforce, making it easier for them to grow and thrive.
Step 5
Support for the Labour Force during Covid-19
Answer
In response to the economic challenges posed by Covid-19, providing social welfare payments to employees who lost their jobs can significantly support businesses. This ensures that consumers maintain a source of disposable income, which is vital for local businesses.
During such recovery periods, introducing support schemes—like grants or subsidies for businesses affected by lockdowns—can also aid in stabilizing the economic landscape and encouraging spending.