Dáil Éireann díospóireacht -
Wednesday, 22 Oct 2003

Vol. 573 No. 1

Written Answers. - Social Welfare Budget.

Pádraic McCormack

Ceist:

113 Mr. McCormack asked the Minister for Social and Family Affairs the way in which the social welfare budget compares to the other EU nations in terms of percentage of GDP and the percentage of GDP in the years since 1997. [24326/03]

Joe Costello

Ceist:

123 Mr. Costello asked the Minister for Social and Family Affairs if her attention has been drawn to the fact that Ireland spends the lowest proportion of GDP on social protection in the EU; if the Government intends to raise this level to the European average; and if she will make a statement on the matter. [24208/03]

Minister for Social and Family Affairs (Mary Coughlan)

I propose to take Questions Nos. 113 and 123 together.

The scope and operation of social welfare systems of EU member states vary greatly and for this reason care needs to be taken in interpreting comparative data on social welfare budgets. 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 – for example, certain FÁS programmes, and other social exclusion programmes.

The latest EUROSTAT figures on social protection expenditure were released in February 2003 and deal with developments up to and including 2000. It does not take into account the developments in social protection expenditure over the last two years.

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. 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.

In addition, 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, compared to an average of 2.5% in the EU, while levels of unemployment declined from 14.3% to less than 4% over the same period. 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 Ireland over the period 1993 to 1999 was "well above the average." EUROSTAT figures show a 21.4% increase in theper 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 this Government will continue to address this guided by the national anti-poverty strategy, while at the same time taking measures to maintain economic growth and competitiveness.