State spending on childcare, eldercare and higher education should increase - Tasc

An increase in State spending on childcare, higher education and eldercare is needed as Ireland emerges from the pandemic, a new report commissioned by public service trade union, Fórsa, has said.

Ireland’s spend on social protection is already lagging behind our EU counterparts, according to the report which was written by the social change think tank Tasc.

The research found that Ireland spends 28 per cent less on pensions and 12 per cent less on family and child welfare when compared to high-income EU countries.

Ireland’s spending is just 40 per cent of the national income, making it the eighth lowest in the EU, and below the EU average of 46.5 per cent, according to the report.

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The report suggested that any increase in spending should be funded by a reduction in tax relief and an increase in PRSI.

The report called for the retirement age to be kept at 66 and for spending on eldercare supports to increase by 0.4 per cent of the national income, equivalent to just under €900 million, in the coming years.

It also recommended a €1.5 billion increase in funding for the early years sector, to bring total funding to one per cent of the national income, as recommended by Unicef.

There should also be a trebling of public funding for renewable energy research and development, according to the report, and fossil fuel subsidies should be phased out.

The report State spending on higher education should be returned to 2000s levels. The cap on recruiting permanent staff should also be lifted, and a long-term strategy for the sector should also be developed.

Low social insurance (PRSI) contributions, particularly on the employer side, is the “single biggest cause” of the shortfall in State revenue when compared to other high-income EU countries, according to the report.

Employers’ and self-employed PRSI should be increased to raise the national income by one percent, to fund increased State spending to improve public services, the report said.

The capital gains tax relief, which is tax relief on the income made from a sold asset, should be phased out, and the property values used to calculate local property tax also need to be updated, according to the report.

The research argued for a more far-sighted and visionary State post-Covid, with a focus on improving public services and addressing societal needs.

Fórsa general secretary Kevin Callinan said Ireland can achieve an expanded State.

“We spend far less on public services and infrastructure than similar European countries - almost €3,500 less per person each year, or €17 billion in 2019 alone.”

He said this is why Ireland lacks the ‘social wage’ other European countries have, such as access to free health care at the point of delivery, access to free or affordable childcare and early years’ education, and access to social housing.