Mary Coughlan (Donegal South West, Fianna Fail)

There is a very simple answer to that question; it is a demographic issue. In many European countries there is higher GDP expenditure on social protection because they have a greater number of elderly persons than we do at present.

In the seven year period, 1990 to 1996, EU social protection expenditure as a percentage of GDP rose on average by 2.9% from 25.5% to 28.4% as a result of the lower rate of economic growth and rising unemployment during the period. Four years on, the percentage had declined slightly to 27.3% due to renewed economic growth and an actual decline in social protection expenditure in some countries in the European Union, some of which would have been attributed to the decline in unemployment.

In Ireland, in the same seven year period, 1990 to 1996, expenditure on social protection as a percentage of GDP fell slightly from 18.4% to 17.8%. By the year 2000 the figure had fallen further to 14.1%, reflecting unprecedented levels of economic growth and job creation. Annual rates of growth ranged from 8% to 11% in the period 1994 to 2000 while levels of unemployment declined from 14.3% to less than 4%. Although there was a percentage decrease in social protection expenditure in relation to GDP, there was no reduction in the level of actual social protection expenditure during this period but rather a substantial increase.

EUROSTAT figures show a 21.4% increase in per capita expenditure on social protection in the period 1995 to 2000 compared to the EU average of 8.7%. Over the longer period 1990 to 1999 there was an increase of 50% in real terms compared to the EU average of 24%. This is reflected in the 62.5% increase in expenditure on sickness benefit and the 74.6% increase on invalidity and disability benefit and the 39.3% increase on old age benefits between 1995 and 2000.