Written answers

Tuesday, 14 November 2006

Department of Social and Family Affairs

Wealth Distribution

9:00 am

Photo of Caoimhghín Ó CaoláinCaoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Question 397: To ask the Minister for Social and Family Affairs his views on the findings of a recent OECD report which found that the level of wealth distribution here is among the lowest in the OECD, ranking 27th out of its 30 Member countries when it comes to so-called social transfers. [33235/06]

Photo of Séamus BrennanSéamus Brennan (Dublin South, Fianna Fail)
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The OECD's use of the phrase "social transfers" 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. My Department is responsible for some 50% of this expenditure. The OECD acknowledges the fact that differences in the structure of social protection systems and programmes between countries result in the data not being directly comparable. In relation to Ireland in particular, the level of expenditure is significantly influenced by the age profile of the population. Ireland, currently with one of the youngest populations, needs to spend less on pensions, healthcare and care of the elderly than most other OECD countries. In addition, the relatively low level of unemployment means that social protection expenditure for this contingency has been low. Comparisons are also affected by the fact that Irish social security payments are flat-rate while most other OECD countries have pay-related benefits, financed by considerably higher rates of social security contributions — in some cases 3 times higher than the Irish rates.

Under this Government there has been a sustained and substantial increase in social protection expenditure. The OECD report is based on figures of Irish social protection expenditure in 2002. What is significant is the rate of growth of social expenditure in Ireland. The level of 13.75% of GDP in 2001 jumped to 15.8% in 2002 at a time when many other countries showed no growth or even a reduction in this aspect. No comparable figures are yet available from the OECD for 2003 or since, whereas the expenditure by my Department during 2003, 2004 and 2005 rose by almost 28%. It should also be borne in mind that between 1997 and 2006 the basic rate of social welfare payment increased by 99.7%, well ahead of the 34.2% increase in consumer prices and the 67.7% increase in gross average industrial earnings. This Government will continue to address the scope for further improvements in Ireland's social protection infrastructure, while at the same time continuing to take the measures necessary to maintain economic growth and competitiveness and thereby generate the resources for further social investment.

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