Fat chance of tackling fiscal fallout of obesity
More than one child in eight never eats a breakfast on a weekday. More than one in five sometimes goes to bed hungry.
This is morally obnoxious but it’s also fiscally reckless: children who are physically and socially neglected will cost the State a fortune when they grow up.
Ending lone-parent payments when a child reaches the age of seven without having in place an adequate system of childcare is just one example of an approach that will, as a matter of certainty, place larger burdens on State spending in the future.
PENSIONS: Ireland enjoys a huge fiscal advantage over other EU countries by virtue of having a particularly young population. One of the effects of this is that demand for health services is much lighter: the percentage of the population reporting good or very good health is the highest in the EU and is double that of Portugal.
Another is that the proportion of the population that is of working age is much higher than elsewhere, but we know that the number of people over 65 is expected to more than double over the next 30 years.
Basic fiscal responsibility therefore demands a pension system that works. If incomes drop off a cliff when people retire, the consequences are personally nasty – but they are also fiscally dire: more people directly dependent on the State, fewer able, for example, to pay for hospital or nursing home care.
Yet pensions policy is in an unholy mess. The National Pension Reserve Fund has been vaporised, largely because of the bank guarantee. Pension policy is based on encouraging people to invest in private pension funds. Their performance is abysmal: the average five-year return of Irish pension funds is minus 2.9 per cent. The average 10-year return is 2.2 per cent – and this is before the fund managers take their huge fees.
INEQUALITY: Inequality is enormously expensive. The health- related effects of inequality alone cost the Irish taxpayer about €6 billion a year. We know that inequality is increasing rapidly as a result of current policies, which means that these public costs will also soar in the future.
There are other issues that will have a determining effect on public finances over the next 20 years: environmental sustainability, oil dependency and management of natural resources, to name but three. If we were serious about balancing budgets, we’d be talking about them. The silence, in this case, is eloquent.