DERMOT RYAN,
Madam, - I would like to refer to Fr Sean Healy's article in The Irish Times (Monday 20th), making the case that "More Taxation (is) needed to bring (Irish) social services, infrastructure to EU levels".
Fr Healy's article states that Ireland's total receipts from taxation and social insurance are the lowest in the EU and 7.5 per cent below the EU average in GNP terms.
It is not clear that Fr Healy has used consistent data to derive his 7.5 percentage points revenue gap - nor, indeed, that this is the relevant basis for assessing comparative expenditures. The most recent, consistent, EU Commission data (estimates for 2002, published in the Commission's Economic Forecasts, Autumn 2002 last November) indicate a gap of about 5 percentage points between total Irish public revenues and the equivalent EU average on a GNP basis.
Even this simple comparison ignores important, relevant facts:
- As our debt burden is lower than the EU average, we spend less of our revenues on interest payments;
- Since our population is much younger than those of other EU countries, we do not have the same need for age-related social expenditure, including on pensions, as other member-States.
The same Commission estimates put Ireland's non-interest public spending in 2002 at some €200 more per capita than the EU average. At an underlying level - with appropriate adjustment, in addition, for differing age structures - per capita Irish public spending is more than on a par with the EU average..
The factors currently in our favour can not be relied upon to last indefinitely into the future. Thus, the comparative figures which I have just outlined are a far more relevant measure of the situation since we must look not only to current spending needs but to what the implications are going forward - a very important consideration often overlooked in such debates. - Yours, etc.,
DERMOT RYAN, Press Officer, Department of Finance, Upper Merrion Street, Dublin 2.