Denis Naughten
Question:94 Mr. Naughten asked the Minister for Social and Family Affairs the expenditure on social protection as a percentage of GDP, for each year since 1995; and the EU average for each of those years. [12166/04]
View answerWednesday, 28 April 2004
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Written answers
EUROSTAT, the Statistical Office of the EU, publishes comparisons of social protection expenditure as a percentage of GDP across the EU. This encompasses not only social welfare expenditure but also expenditure in other areas such as health care, social housing, employment support programmes and other social inclusion programmes.
The latest EUROSTAT statistics on social protection expenditure were released last Friday and deal with developments up to and including 2001. In terms of expenditure on social protection as a percentage of GDP the figures forIreland are: 1994 — 19.7%, 1996 — 17.8%, 1998 — 15.4%, 2000 — 14.2% and 2001 — 14.6%. The equivalent EU average figures are: 1994 —28.5%, 1996 — 28.4%, 1998 — 27.5%, 2000 — 27.3% and 2001 — 27.5%. These statistics do not take into account the developments in social protection expenditure over the past two years. No comparable figures are available for 2002 or 2003.
When examining such data it is important to remember 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, as opposed to direct cash payments. In fact, the EUROSTAT release itself states that: "The European average masks major national differences in the structure of social protection funding." The level of expenditure is also significantly influenced by the age profile of the population. Currently, Ireland, with one of the youngest populations in the EU, needs to spend less on pensions and health care/care of the elderly than most other member states. The extent to which the State directly provides supplementary pensions and child care are also important factors.
In addition, social protection expenditure as a percentage of GDP is significantly influenced by the pace of economic growth and the level of unemployment. The statistics show that at EU level between 1993 and 1996, social protection expenditure relative to GDP stabilised at a level below the peak of 28.8% in 1993. This was due to renewed GDP growth and slower growth in social protection expenditure, particularly related to unemployment benefits. Over the period 1996 to 2000, the EU average dropped from 28.4% to 27.3% but there was a slight increase to 27.5% in 2001.
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 14.2% 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. In 2001, there was an increase to 14.6%.
Under 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 expenditure on social protection in four EU countries, including Ireland at 4.7% per annum, over the period 1992 to 2001 was "particularly marked." The EU average was 1.9%. The EUROSTAT figures show a 40% increase in the per capita expenditure on social protection in Ireland in the period 1994 to 2001, compared with an EU average of 13.9%.
This Government will continue to address the scope for further improvements in Ireland's social protection infrastructure, guided by the national anti-poverty strategy, while at the same time continuing to take the measures necessary to maintain economic growth and competitiveness.
Question No. 95 answered with QuestionNo. 83.