Olivia Mitchell (Dublin South, Fine Gael)
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Question 138: To ask the Minister for Social and Family Affairs the rate of public social expenditure here in comparison to that of the other EU countries; the EU average respectively; and if he will make a statement on the matter. [20788/07]

Martin Cullen (Waterford, Fianna Fail)
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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 areas such as health care, social housing, employment support programmes and other social inclusion programmes. The latest such statistics were published on 24 July 2007 and cover developments up to and including 2004. No comparable figures are yet available for 2005 or 2006.

When examining such data, it is important to remember that gross expenditure measures do not take account of social charges or taxes which may be levied on benefits after they are paid, nor do they include transfers made by means of tax concessions, as opposed to direct cash payments. For example, tax relief on contributions towards occupational and private pensions, which are an important feature of Ireland's pension system, is not counted as expenditure.

The EUROSTAT release draws attention to the fact the EU average masks major national differences in the structure of social protection funding, partly related to differing levels of wealth between countries, and also reflects differences in social protection systems, demographic trends, unemployment rates and other social, institutional and economic factors.

The level of expenditure is also significantly influenced by the age profile of the population. Ireland, currently with the youngest population in the EU, needs to spend less on pensions and healthcare/care of the elderly than most other member states.

In 2004, social protection expenditure accounted for 27.3% of GDP in the EU-25 countries. The corresponding ratio for Ireland was 17% — up almost 3 percentage points from 2000 (14.1%). Eurostat acknowledges that the very significant growth in GDP means that the large real increases in benefit rates and child income support introduced in recent years is somewhat masked. It further notes that the level of expenditure in Ireland is also significantly influenced by the lower proportion of pensioners and the reliance on private pension provision to supplement the State pensions and lower spending on unemployment benefits in the light of sustained low unemployment figures.

The fact is that under this Government there has been a sustained and substantial increase in social protection expenditure. The EUROSTAT report states that the increase in Ireland's per capita expenditure (7.8% per annum and the second highest of all EU countries, behind Hungary) from 2000 to 2004 in comparison to that of the EU as a whole (2.2% per annum), was "particularly marked". Moreover, it should be noted that social welfare expenditure will have increased substantially during the three year period from 2005 to 2007, Following the improvements announced in the 2007 Budget, overall spending on social welfare in Ireland in 2007 will be over EUR 15.316 billion — an increase of more than 13% from 2006. This is the highest ever spend on social welfare, and represents expenditure of nearly two and a half times the social welfare budget of EUR 6.2 billion in 1999.

This Government will continue to address the scope for further improvements in Ireland's social protection infrastructure, guided by the new National Anti Poverty Strategy, and the National Development Programme 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.