CONTRARY to the impression given by some people on the right of our political spectrum, our expenditure on social welfare is not particularly high. The richer a country, the proportion of its output it can afford to allocate to social purposes.
Within western Europe this ratio ranges from about one sixth of its output in the case of the poorer countries to about one third in the case of the richest. A recent European Commission publication shows that in 1993 we applied just under one quarter of our GNP to social purposes which, for our stage of economic development, was very much in line with our EU partners.
However, this masks an Irish pattern of social spending that is somewhat different from the norm for our partners. Because of our high level of unemployment in 1993 (two fifths higher then than in the rest of the EU at that time), but also perhaps because some people who by international standards would not be regarded as unemployed receive payments in Ireland, unemployment payments in that year here absorbed twice as large a share of social expenditure as in the rest of the community.
The Irish figure was, indeed, higher than in any other EU country except Spain.
Of course, with our unemployment level now barely one percentage point higher than in the rest of the community (12 as against 11 per cent), this disproportion will have been considerably reduced.
The other area of social spending that absorbed an above average share of the resources we devoted to social purposes in 1993 (10 per cent as against 6.5 per cent elsewhere in Europe) is Family Support.
As in the case of unemployment this reflected the large proportion of our population who are beneficiaries of such support. Despite the decline of over 100,000 in the number of children between 1986 and 1993, in the latter year children still represented a one third larger share of our population than in the rest of the EU.
In relation to our income level the rate of children's allowances here was, however, considerably lower in 1993 than in any other northern European country. In fairness it should be said that between 1980 and 1993 our child payments had been catching up with those of our partners.
And in 1995 they received a further significant boost as part of the process of raising the child payments of those at work to the level paid to those who are on social welfare, thus eliminating an important poverty trap.
Our higher spending on larger numbers of unemployed and children is, however, fully offset by the much lower proportion of output that is absorbed by pensions. In 1993 the proportion of our population over 65 was two fifths lower than in the rest of the community.
How long are we likely to maintain this advantage vis a vis our partners? The first young people to benefit from the employment growth generated by the recovery of our economy at the end of the 1950s were those born at and immediately after the end of the war.
That generation will not start to reach retirement age until early in the next century. But because of a combination of reduced emigration during most of the period and a higher birth rate after 1968, the number of retired people will continue to rise thereafter until near the middle of the century.
HOWEVER, the EU projections show that even in 30 years' time the burden of retirement payment upon the working population will be one sixth lighter here than elsewhere in the community.
Meanwhile, during the next decade we will not see any significant increase in the numbers of retired people, but are likely to benefit from a reduction of dependency at the other end of the age scale and the levelling off in the growth of student numbers since 1993. The drop in employment which started in the same year also seems likely to continue.
ALREADY the benefits of a lower rate of dependency have begun to be seen. In the past decade output per worker rose by 37 per cent, but because of a decline of over one sixth in the average number of dependants per worker the increase in resources available per head of population has jumped by half as much again, 56 per cent.
This is the exact opposite to what happened between 1971 and 1986 when a sharp rise in the average number of dependants whom the average worker had to "carry" diluted greatly the impact of increased productivity upon our living standards.
The effect of this recent large increase in resources per head has been to enable the very low savings of the mid 1980s to be boosted to a more than adequate level, while raising the average level of material living standards by well over one third.
If, as is projected by the ESRI, output per worker rises by over two fifths between now and the year 2005, and if as seems likely the ratio of dependants to workers falls by a further one sixth the material resources available per head would rise by a further three fifths in this nine year period. And with savings already at an adequate level, these additional resources would largely be available to boost personal consumption.
Coming on top of what has already been achieved since 1986 this would by the year 2005 bring our average level of material living standards, in terms of personal consumption per head, up to a level 2 1/4 times greater than a decade ago.
The increase in living standards that has taken place in the past decade has produced a noticeable "feel good" factor here, contrasting sharply with the mood that has continued to prevail in neighbouring Britain.
If I am right in believing that our savings level is now adequate, and if as a result personal consumption absorbs the bulk of the increase in resources in the years ahead, this sharp acceleration in our already steadily rising living standards carries with it both opportunities and dangers.
Such unaccustomed prosperity could produce an even more materialistic society than that which already exists, bringing about a further widening of the gap between rich and poor - or, under wise leadership, it could be turned to advantage, by using the extra resources to improve the living conditions of the more disadvantaged sections of our society.
All kinds of dubious arguments will no doubt be put forward against redistributive policies. We will, I am sure, be told that all the additional resources flowing to the Exchequer from this exceptional growth of output and consumption must be used to reduce taxes to generate further growth. Growth for its own sake?
The provision of better social or public services will be presented as gravely endangering our prosperity. The Maastricht criteria will be evoked as a reason for perpetual public parsimony; as if growth has actually made it more difficult, instead of much easier, to achieve these targets. And as if it were beyond the wit of man to find a way of using additional resources for the general social good.
The crucial question is whether during this period of exceptional economic growth - for which there has been no precedent in our economic history, and which may never be repeated - there exist or will emerge within our political and administrative system people with the ideals, the vision, the commitments and the skills to take this unique opportunity to transform our society.
That is what our politics of the next decade should be about.