Wednesday, 31 March 2004

Ceisteanna (1)

John Bruton


1 Mr. J. Bruton asked the Taoiseach his views on whether the Central Statistics Office should develop a parallel periodic measure of domestic progress, alongside GDP and GNP, to provide a more reliable, if less easily quantifiable measure of real progress, leaving out spending to offset social and environmental costs arising from GDP growth, subtracting damage to the environment, taking account of charges in the degree of income inequality and including unpaid household and voluntary labour not included in GNP and GDP. [9598/04]

Amharc ar fhreagra

Oral answers (20 contributions) (Ceist ar Taoiseach)

I am aware there have been a number of initiatives in various countries aimed at drawing up composite indices of sustainable development. These have generally been undertaken as special research projects conducted by universities and other research organisations, rather than as a regular feature of the work of national statistics offices. This work has generally been concerned with adjusting the traditional measure of GDP to take account of other features such as those listed by the Deputy.

While use of such an index would understandably be of considerable interest, there is little consensus about the merits of such an approach. There is no agreement on the progress indicators that should be included or excluded or on the weighting or level of importance that should be assigned to the different indicators. Because of these difficulties, these measures have been largely developed by research organisations rather than by official statistics offices.

Would the Minister of State consider it worthwhile to seek to create a consensus on these points and act in a leadership role on this matter, rather than wash her hands of it? Does she agree that much of what is measured as progress in the GDP represents a disimprovement in the quality of people's lives, whether it be more time spent in traffic jams, for example, or greater costs for security, which appear as progress in the GDP but which are detrimental to quality of life? If we in this House are to measure how our work improves or disimproves the quality of people's lives, does she agree that we need an authoritative measure of the quality of life and should not rely, as we continue to do, on crude measures such as the GDP and GNP, which in many cases do not measure improvement in living conditions?

GDP and GNP were never designed to measure quality of life or happiness, and are merely measures of production and national income. It would be very difficult to place a price on something like voluntary or unpaid work, or environmental impact. I know we do not take account of distribution of income as a sign of welfare, but GDP and GNP do not pretend to do so. Various research has been carried out by universities and others as to what measures could be included, but central statistics offices in most countries recognise that it would be very difficult to come up with a composite set of indices.

We are not washing our hands of the matter. The Deputy is aware that last December, the CSO launched a new annual publication, Measuring Ireland's Progress, which incorporates 108 different indicators of the country's progress. It analyses the economic, social and environmental situation, comparing it to the other EU states, largely because there was no general consensus about the merits of including the elements Deputy Bruton referred to. That type of range of indicators is very useful.

Will the Minister of State agree that the fixation on GDP and the GNP leads to active distortions of policy choices, on the basis that because something is not counted, it does not count for policy makers? For example, the choice by a parent to stay at home to look after children is counted as a reduction in GNP, while if the parent goes out to work and pays someone to look after the children, that is seen as an increase in GNP, even though the first choice may contribute more to the welfare of those being looked after. When we draw up social policies, however, we count elements which impact on GDP or GNP and ignore elements which they ignore. This fixation in policy making with figures, and the excessive reliance on them, as part of the take-over of the Government by consultants is leading to a distortion of policy choices in a perverse way. As Minister of State responsible for statistics, Deputy Hanafin is obliged to do something about this and not leave it to universities.

GDP and GNP do not set out to measure a country's well-being. They are used throughout the world as an internationally-accepted accounting rule so they are valuable for comparative purposes. The development of social policy in any Department is not based solely on those indicators, on the production of goods and services. We also use the statistics available to us from the indicators I mentioned, those carried out by the CSO, and from various other surveys such as the household survey, and research carried out by the National Statistics Board. There is also a raft of EU regulations which must be adopted by the CSO and which it uses in compiling information.

We also have our census information. Next month we will have a pilot census with will deal with some of the issues referred to by Deputy John Bruton. One of the questions to be asked in that census relates to how many people are engaged in home duties, in caring either for the young or elderly in their own homes, and how many people are involved in voluntary activity, whether it be cultural, charitable or political. All that information is available to us and is used in policy making so it is not simply a matter of assigning value only to GDP and GNP. The latter provide crude figures, which is what they set out to do.

Does the Minister of State agree that there are well established mechanisms for evaluating the sort of data referred to by Deputy John Bruton and that the Government has been very slow to use them except on a pilot basis? In the context of the economic prosperity enjoyed by this country for the past ten years, there has been a very weak definition of the income base and the quality of life, in the broadest sense, enjoyed for instance by families with children and by poorer people. In the type of consultancy works to which Deputy John Bruton referred, more value is often assigned by consultants to people who live in richer areas. For instance, a public transport project in south County Dublin is deemed to have far more value because more people are at work there than in an area such as Ballymun where perhaps fewer people are in paid employment. The same holds in rural areas.

These realities impact on the decisions made daily by the Government. At the heart of this is the failure to realise what families with children require from our economy and what is needed by people who in economic terms are less well off. These might be people with disabilities, with a social welfare income. I am disappointed the Minister of State has not brought more imagination to this issue because other countries have done so very successfully.

Other countries' central statistics offices do not collate this information. It is instead done by research groups and universities and the information gained is valuable. However, how can the Central Statistics Office measure life expectancy and predict that one can live one year longer when other factors, such as degradation of the environment, must be taken into account? It is how to measure and what the indices are——

If one is poor, one dies younger.

Allow the Minister of State to continue without interruption. She is replying to Deputy Burton.

I am not questioning the value of having the information. I am questioning the ability to assess that value in the Central Statistics Office.

Who better to do it?

Some private research has been done by universities and other bodies. A recentFinancial Times article spoke of trying to measure people’s happiness. How can a statistics office measure it? If one is using statistics and figures, the obvious way of measuring it is with the amounts of goods and services produced in the country. However, it must be realised that such a measure is limited in its value and is not pretending to be anything else. It is simply an acknowledgement of the accounting rule and the value of the goods and services of the country.

However, that is not to say that other information on quality of life is available. The UN annual report on the human development index measures countries' achievements on a comparative basis, in which Ireland ranks 18 out of 173. There are a number of factors at play as to why it is difficult for the Central Statistics Office to assess this information. There is no agreement on the measures that could be used, therefore making it difficult to do it on a comparative basis. However, the Central Statistics Office has devised 108 indicators promised under Sustaining Progress.

Does the Minister of State agree that Deputy John Bruton's proposal is a fundamental prerequisite to many policy decisions that are taken? Whether it is the Central Statistics Office, another Department or some expertise brought in, it is essential that the issue be addressed. FEASTA, the Foundation for the Economics of Sustainability, has produced considerable research, drawing on information from Scandinavian and American countries where measures of quality of life are presented with gross domestic produce, GDP, and gross national product, GNP. Will this work be examined further to see if such measures can be implemented in Ireland?

Recently, the New Economics Foundation, in advance of the UK budget, highlighted that the measure of domestic progress can no longer show economic growth as giving rise to improvement in quality of life over a whole range of issues, since it peaked in 1976. Will the Minister of State accept that, since then, while economic growth has increased, quality of life, in terms of sustainability and individual happiness, has decreased?

I welcome recent census figures on matters such as women in the home that was collated by various changes to the census form. Given that knowledge of Irish was measured in the previous census, will the Minister now accept that it is not impossible to measure some of the matters that she regards as difficult? Measuring knowledge of Irish is by no means a black and white process as people assume levels of Irish in different degrees. Likewise, measures of fulfilment, happiness and quality of life should be on the census forms. They can be answered whatever way one wants, but at least they are recognised as being important.

The importance and the value of this information is not disputed. The problem is how it is assessed. It is an entirely subjective matter to decide if one is happier than another or measure one's quality of life as opposed to another's.

Other countries do it.

The statisticians in the Central Statistics Office are a highly professional body of people.

The Minister of State pays attention to opinion polls.

The question is how they can measure this information from a statistical viewpoint. The information that Deputy Sargent referred to is available. Tá súil agam gur léigh an Teachta an tuarascáil a tháinig amach ar stádas na Gaeilge. This was encouraging information from the Central Statistics Office. The 108 indicators contained in that agency's annual report give not just the economic value but social and environmental measures too. However, it is not a matter to be dealt with in the context of GDP and GNP.

All Members appreciate the development and range of work of the Central Statistics Office in recent years which is now providing more information to enable evidence-based policies to be developed. Regarding economic welfare and social progress, the type of indices are not involved. The Central Statistics Office launched figures showing that GNP for 2003 grew by 3.3% while GDP grew by 1.4%. The last quarter of 2003 is particularly encouraging when GNP rose by 5.5%. Good economic progress has been made and can be easily assessed.

The Minister of State has just proved our case.

That is just what we were arguing. The Minister of State thinks that is all there is to this.