Latest news with #IFAC
Irish Times
4 days ago
- Politics
- Irish Times
The Irish Times view on education spending: tackling the complex question of teacher shortages
Ireland remains at the 'top of the league of shame' when it comes to average class sizes, according to the general secretary of the Irish National Teachers Organisation (INTO) John Boyle. He made the comment in reference to the most recent figures on class sizes released by the Department of Education which found that the average number of pupils per class is 22.5 compared to the European average of 19. Boyle castigated the Government for not reducing class sizes in the last two years, saying that they could not repeat this mistake in the coming budget. October will reveal whether the teacher's leader gets a response from the Coalition, but research from the Irish Fiscal Advisory Council (IFAC) published this week may offer a possible explanation as to why the Government is not treating the matter with the urgency Boyle demands. As part of a wider study of tax and State spending in Ireland, the fiscal watchdog noted that despite spending less than its peers on education, Ireland generally achieves better outcomes. The Government currently spends close to the average of other high income European countries on education, according to IFAC, but when the figure is adjusted for demographic factors – such as the higher percentage of Irish people under 19 – Irish spending is well below European levels. Despite this, education outcomes in Ireland are well above average. Ireland now has the highest share of its population with a third-level qualification in Europe and scores well on Programme for International Student Assessment (PISA) tests for reading, science and mathematics. The figures suggest that Irish spending on education was amongst the most efficient in the OECD. READ MORE IFAC says that the fall in the number of children in Ireland over the coming decade may improve the teacher student ratio. As the Government sets about framing the budget against an uncertain backdrop, the prospect that the issue of class size could be resolved without real spending increases is a tantalising one. That said, the difficulty schools are facing in filling vacant posts remains acute.
The Journal
5 days ago
- Business
- The Journal
Ireland's young population is keeping public spending down - for now, says IFAC
IRELAND'S YOUNG POPULATION means the State is spending less on pensions and healthcare than other European countries, according to the budgetary watchdog. As a result, the Irish State needs to prepare for a growth in spending as demographics shift and the demand for public services increase. Analysis by the Irish Fiscal Advisory Council (IFAC) found that while Ireland appeared to be a low-tax, low-spend country, public spending is low relative to national income. The fiscal advisory body said this was mainly due to Ireland's young population and a buoyant economy. But as Ireland's population ages, public spending on pensions and healthcare is expected to rise, IFAC said, bringing it closer to levels in other European countries. Currently, Irish Government spending is 3.3% of national income lower than other European countries, while it collects 4.7% of national income, or €2,600 per person. When excess corporation tax from several multinationals located in Ireland is excluded, Ireland collects 8.6% of national income or €4,700 per person less than other European countries. Advertisement Employers and employees in Ireland pay less in social insurance than is typical across Europe. The fiscal watchdog said that additional pressures will be put on the budget in the years ahead, driven by an ageing population and climate change. Since 2015, the number of people aged 65 years and over in Ireland has increased by 37%. The Government's new savings funds – the Future Ireland Fund and the Infrastructure, Climate and Nature Fund – will help cover some of the costs but will not cover them all. Author of the report Niall Conroy said Ireland needed to prepare for higher levels of public spending in the future. 'Ireland collects a lower level of government revenue than most other high-income European countries,' he said. 'This is mostly driven by social insurance paid both by employees and employers. When exceptional corporation tax is excluded, government revenue in Ireland is 4,700 euro per person lower than the European average. 'As a result, the Government will need to raise additional revenue or reallocate existing spending. 'The more the Government saves today, the easier it will be to navigate these challenges.'
Extra.ie
5 days ago
- Business
- Extra.ie
Ireland isn't saving enough for ageing population
The Government's savings funds won't be enough to deal with an ageing population, the State spending watchdog has warned. Ireland will have to raise the pension age to relieve some of the pressure, the Irish Fiscal Advisory Council said. The Government's fund to plan for the future – the Future Ireland Fund – will only cover between a quarter and a half of the costs of our 'rapidly' ageing population, an IFAC report stated. 'An ageing population is the biggest budgetary challenge Ireland faces over the medium term. One in 6.5 people currently is aged 65 or over. This is set to increase to almost one out of every three people by 2057,' it said. The Government's savings funds won't be enough to deal with an ageing population, the State spending watchdog has warned. Pic: Shutterstock In addition, 'those in retirement are also expected to live longer', it added, which is going to put additional pressure on hospitals and other services, and cost the State more in pensions. It noted the Government is reluctant to increase the pension age, which will cost us billions in the future. 'Despite these pressures, the Government opted not to increase the pension age,' it said. 'While other countries are experiencing ageing populations, Ireland is facing a more rapid change. In budgetary terms, this means more demand for healthcare, long-term care and pensions. It will also mean slower growth in the economy and hence in tax revenues.' Pic: Shutterstock It added: 'Action sooner rather than later will ultimately be less costly. Research by the Fiscal Council has shown that acting sooner to manage ageing challenges would cost less than 40% of what it would if actions were delayed.' The IFAC warned that the cost of looking after older people 'will fall much more heavily on the next generation of taxpayers' unless the Government takes action. It said the Coalition must raise extra revenue or cut spending to insulate the economy from these challenges. According to the IFAC, the State is collecting €2,600 less in taxes per person compared to other European countries. This rises to €4,700 a person once 'exceptional' corporation tax receipts are excluded. Pic: Getty Images Speaking to Niall Conroy, author of the report and acting chief economist with the IFAC, said the body is 'agnostic' on how the Coalition should safeguard the Exchequer. Mr Conroy said the Government should continue to set aside corporation tax revenues while the economy is performing well, noting that saving more now will mean fewer 'adjustments' later. The IFAC paper, which assesses tax and spending levels relative to other high-income EU countries, comes amid uncertainty over our finances in the short and medium term. Ireland has fewer older people compared to other countries, with 15.5% aged 65 and above, versus a European average of 20.9%. Pic: File 'However, this is expected to change… the share of over-65s by 2050 is projected to be higher than any high-income European country today,' the paper said. This change will mean more spending on pensions and healthcare, and will 'gradually bring our public spending closer to levels seen in other European countries'. The IFAC noted that one area where Ireland is already a relatively high spender is healthcare. 'As the population ages, this is likely to rise further, making Ireland even more of an outlier,' it said. Our health spending is significantly greater than that of an average high-income EU country of similar size. A 'heavy reliance on hospital care' is cited as a 'major driver' of big health costs, plus spending on outpatient services, which is higher than in other countries. The IFAC also pointed to a lack of infrastructure – Ireland has 50% less healthcare infrastructure, such as hospital beds, than other high-income European countries. Improving efficiency and productivity will be key to managing increased healthcare costs, it said. 'Shifting more care from hospitals to community settings… could help reduce costs. Recent IMF analysis also indicates that further gains in healthcare efficiency are possible,' it stated. More investment will be needed to meet climate targets, the IFAC noted. The transition from fossil fuels will mean Government revenue streams, including excise duties and the carbon tax, are expected to diminish, further narrowing the tax base
Irish Examiner
5 days ago
- Business
- Irish Examiner
Ireland is economically closer to Boston than Berlin
Ireland's young population means it is closer to Boston than Berlin when it comes to tax and spending levels. New research from the Irish Fiscal Advisory Council (IFAC) shows the public finances are benefitting from a young population and a strong economy. IFAC said Ireland's relatively young population means the government spends less on pensions and healthcare than it otherwise would. However, as our population ages, spending in these areas is expected to rise. This demographic shift will gradually bring Ireland's public spending closer to levels seen in other European countries. Ireland's strong economy also helps to explain why public spending is low relative to national income. After adjusting for these factors, Irish government spending is 3.3% of national income lower than other European countries. Ireland collects a lower level of government revenue than most other high-income European countries. This is equivalent to 4.7% of national income, or €2,600 per person. When excess corporation tax is excluded, the gap widens to 8.6% of national income or €4,700 per person. 'Demographics can have a big impact on government spending and tax levels," the report's author Niall Conroy said. "Ireland's public finances are benefitting from its relatively young population. That means we are spending less on pensions and healthcare than would otherwise be the case. As a result, spending levels in Ireland are lower than in other European countries." "Both an ageing population and climate change will mean higher levels of spending. The two savings funds the government has introduced will help address these costs. But they will not cover all of these costs. As a result, the government will need to raise additional revenue or reallocate existing spending. The more the government saves today, the easier it will be to navigate these challenges," Mr Conroy said.
BreakingNews.ie
5 days ago
- Business
- BreakingNews.ie
Ireland needs to prepare for public spending rise as population ages
Ireland's young population means the State is spending less on pensions and healthcare than other European countries, according to the budgetary watchdog. As a result, the Irish State needs to prepare for a growth in spending as demographics shift and the demand for public services increase. Advertisement Analysis by the Irish Fiscal Advisory Council (IFAC) found that while Ireland appeared to be a low-tax, low-spend country, public spending is low relative to national income. The fiscal advisory body said this was mainly due to Ireland's young population and a buoyant economy. But as Ireland's population ages, public spending on pensions and healthcare is expected to rise, IFAC said, bringing it closer to levels in other European countries. Currently, Irish Government spending is 3.3 per cent of national income lower than other European countries, while it collects 4.7 per cent of national income, or €2,600 per person. Advertisement When excess corporation tax from several multinationals located in Ireland is excluded, Ireland collects 8.6 per cent of national income or €4,700 per person less than other European countries. Employers and employees in Ireland pay less in social insurance than is typical across Europe. The fiscal watchdog said that additional pressures will be put on the budget in the years ahead, driven by an ageing population and climate change. Since 2015, the number of people aged 65 years and over in Ireland has increased by 37 per cent. Advertisement The Government's new savings funds – the Future Ireland Fund and the Infrastructure, Climate and Nature Fund – will help cover some of the costs but will not cover them all. Author of the report Niall Conroy said Ireland needed to prepare for higher levels of public spending in the future. 'Ireland collects a lower level of government revenue than most other high-income European countries,' he said. 'This is mostly driven by social insurance paid both by employees and employers. When exceptional corporation tax is excluded, government revenue in Ireland is €4,700 per person lower than the European average. Advertisement 'As a result, the Government will need to raise additional revenue or reallocate existing spending. 'The more the Government saves today, the easier it will be to navigate these challenges.'
