Vol. 563 No. 6
3 Mr. Boyle asked the Minister for Social and Family Affairs her views on the most recent survey of levels of social protection expenditure in the European Union, in view of the fact that such levels in Ireland are at only 60% of the EU average. [8396/03]
Social protection, as described in EUROSTAT reports, on "The Social Situation in Europe" covers not only the income support schemes administered by my Department, but also health care, supports with housing and other social and family services.
The latest EUROSTAT figures on social protection expenditure were released in February 2003 and deal with developments up to and including 2000. It is important, therefore, to recognise that it does not take into account the substantial social protection expenditure which this Government has introduced over the past two years.
In any examination of this type of data, it is important also to recognise that, although there is a reasonably close relationship between social protection expenditure and GDP per head, different expenditure levels among member states do not necessarily reflect accurately the differences in the spending priority assigned to the well-being of citizens.
It is also the case that gross expenditure measures can distort the real picture, as they do not take account of social charges or taxes which may be levied on benefits. Nor do they include transfers made by means of tax concessions or allowances, as opposed to direct cash payments.
It is also the case that social protection expenditure as a percentage of GDP is significantly influenced by the pace of economic growth and the level of unemployment. For example, in the three-year period 1990 to 1993 EU social protection expenditure as a percentage of GDP rose on average by over 3% from 25.5% to 28.8%, as a result of the slower rate of economic growth and rising unemployment during that period. Conversely, over the five-year period 1994 to 1998 the percentage declined slightly to 27.7%, due to renewed economic growth and a decline in unemployment during that period.
For Ireland in 1990, expenditure on social protection as a percentage of GDP was 18.4%. This rose to 20.2% in 1993, and then declined to 14.7% in 2000. These changes mirrored the developments just described in other EU countries, except that the level of economic growth and the decline in unemployment were much greater in Ireland than in most other EU countries. Annual rates of growth ranged from 8% to 11% in the period 1994 to 2000 and levels of unemployment declined from 14.3% to less than 4% over the same period.
Other factors which have a bearing on the amount of expenditure are the extent to which the State provides supplementary pensions, child care and elderly care and the way benefits are taxed. Lower State involvement, means lower social protection expenditure.
Additional informationUnder this Government there have been sustained and substantial increases in social protection expenditure. The EUROSTAT report on social protection states that the increase in real terms in expenditure on social protection in Ireland over the period 1993 to 1999 was, “well above the average.” EUROSTAT figures show a 21.4% increase in the per capita expenditure on social protection in the period 1995 to 2000 compared with an EU average of 8.7%, and over the longer period of 1990 to 1999 an increase of 50% in real terms compared with an EU average of 24%.
There is scope for further improvements in Ireland's social protection infrastructure and we must try to maintain economic growth and competitiveness to enable us have the resources to continue making these improvements.
That was a fairly robust defence of an unacceptable situation. I am not sure whether the Minister is arguing that because Ireland has had economic prosperity it needs to spend less on social protection expenditure, or that because the figures were taken in 2000 we will have caught up by now. We cannot have it both ways. Either we are a well-off country that does not need to make this type of expenditure or we have put in the money since.
The Minister did not mention in her reply that Ireland has the greatest wealth disparity in the European Union. Therefore, our reasons for having a higher social protection level of expenditure are greater than other European Union countries. Even if there has been greater expenditure by Government since 2000, with which I would argue – we will know the position when the figures come out – we have not made up a 40% gap since then. I tabled this question because we have a figure which puts us in European terms in a unacceptably low position and it is a challenge for the Minister to argue with her Cabinet colleagues to make sure that we have a proportionate rate of social protection expenditure that any decent society should allow and make provision for.
I agree that there will always be scope for improvement in Ireland's social protection infrastructure. We must try to maintain economic growth and competitiveness to enable us to have the resources in the first instance to continue the improvements that have been made.
We are not comparing like with like in comparing the position here with other EU countries. The level of unemployment here has been reduced considerably. The demographics are different between ourselves and our European counterparts. In particular, they would have concerns regarding their elderly and our pension service is different from that of other EU countries. Therefore, there are difficulties in comparing like with like in that regard.
The Deputy could say that previously the level of expenditure might have been higher as a percentage of GDP, but people were not well off and we had to look after a greater number of people. Now we are looking after fewer people, but we have different support schemes and mechanisms in place. I am sure all Members would agree that having a job is the best route out of poverty. The necessary network and support services are in place. We will achieve the goals set under NAPS in the next number of years and we will consider making a greater investment in social protection over the next number of years. I would like to see that happen, as would any Member of the House. We will be moving towards increased intervention over the next number of years as the economy, hopefully, will continue its growth and competitiveness in order to have the resources available to increase the level of social protection.
Is the Minister prepared to set a specific target to be reached by the end of the lifetime of this Government? If we achieve 70% to 90% of the European average, would that constitute success? Is it something worth aiming for or are we just going to wait and see what happens until we perhaps find in a future study that we are at 50% of the European average?
I will nail my colours to the mast. It is our intention to achieve targets which have been set out in the NAPS strategy, which will reflect an increase in social protection and a different percentage when we come to investment. However, there is no way I will nail my colours to the mast in giving Deputies opposite the actual favourable percentage we see social protection forming as part of our GDP. There has been a huge improvement in the last few years, rates have increased and there has been targeting. Given our different demographics it is difficult to compare ourselves with the EU, particularly when we look at the elderly population and the serious concerns expressed by many EU members about demographic imbalances in particular.
