The delegation may discuss that issue. We have a significant number of systems designed to assist people with low incomes, bordering on poverty. In fairness, there have been a number of initiatives during the years by successive Governments to try to deal with the issue. Deputy Callanan referred to the social employment schemes which are important, particularly in rural areas, as well as various other schemes pertaining to a household benefits package for people of pensionable age. A number of policy initiatives have been taken by the Government to try to alleviate poverty.
We actually spend a sum of €12 billion per annum. The delegation will probably meet the Department of Social and Family Affairs, a senior official from which is present, and also the Minister for Social and Family Affairs, Deputy Brennan. He will tell the delegates that practically one third of our total budget goes into welfare provision. That is a significant amount of money.
This is a major problem because our population is ageing significantly. Our profile is lopsided. We have an enormous number of young people and a significant number of elderly people. I understand the Minister for Social and Family Affairs, Deputy Brennan, made a speech today at an insurance federation conference. The delegation should acquire a copy from one of the senior civil servants. Currently, only half the workforce have pensions. As Deputy Callanan noted, by paying contributions one can earn the right to a State pension when one reaches the age of 65 or 66 years. Very often, however, one lands in a poverty trap, because up to that age one has earned a reasonably good income. Thereafter, one finds one's income cut down and all one has is a State pension.
Consequently, in recent years the Minister has tried to encourage people — young people in particular — to provide for their own contributory pension when they reach the end of their working life. He has made a statement to the effect that only half the workforce have provided for pensions. In general, membership of a pension scheme is voluntary in this country. The Government tries to encourage people to invest money in pensions. One receives tax relief, which can be significant, if one takes out a pension policy. A significant amount of money can be put into a pension scheme. However, due perhaps to our history or youth, people like to receive their full wage packet and spend it with the freedom of youth.
The Government is becoming worried because an enormous bill is mounting, due to the population profile. We already have a high dependancy rate. That will increase as the middle aged move into the elderly cohort. The Government has become concerned and has initiated a number of studies. The National Pensions Board and this joint committee are concerned as to how this dilemma will be resolved. Today, the Minister gave a hint that the Government may well have to do what would have been unthinkable previously, that is, to impose mandatory membership of pension schemes. In other words, if one enters employment, one will be obliged to make a contribution. The Minister — I hope I am not misquoting him — has initiated this policy debate in the past few hours. He will come before this joint committee to explain it to the members. This policy initiative has been taken because this is an enormous issue. It is probably a major issue in the delegates' country. Twenty years ago we were not overly concerned, but concern has grown over the last five or six. We will become deeply concerned about it in the next few. Actuaries are pointing out the amount of money that will be required and projections are being made. Some of us did not like it but this is a matter of opposition. The former Minister for Finance, Charlie McCreevy, put away some money to try to deal with this issue over a number of years. A certain amount of our GDP is put into a fund and kept secure to meet the demands of a rainy day, as we say in Ireland, or the day of reckoning.
This measure will only make a small dent in the problem. The Government is trying to provide for State pensions, which will be an enormous drain during the years. However, it is coming to the stage where young people who are taking up any form of employment will be required to take out pensions. They have been encouraged to take out pensions through tax relief but it has not worked. The Minister is now looking at an alternative proposition to ensure that this problem and dilemma, which will face Governments of whatever hue, is tackled in a positive way.
Perhaps the delegation would like to comment on the points made by various speakers. Could it tell us about its experience in Hong Kong because we have some people who might be glad to visit Hong Kong to discuss the issues?