Raise PRSI to boost state spending, says union report

According to a new report commissioned by Ireland’s biggest union, Fórsa, the PRSI should be increased to tackle underspending on pensions, childcare, education and renewable energy.

The report produced by think tank for Action on Social Change (Tasc) examines the role of the Irish state post-pandemic and recommends key areas where state spending should be increased and how the expenditure gap could be closed.

It reports that at 40% of national income, Irish state spending is the eighth lowest of the 27 EU countries and below the EU average of 46.5%.

The state spends almost €3,500 less per person each year on public services and infrastructure compared to similar European countries, or €17 billion less in 2019 alone.

Ireland spends 28% less on pensions and 12% less on family and childcare compared to high-income EU countries, and only two-thirds of what its group of peers spending on basic research.

Other underutilized areas include early childhood services, including childcare, higher education, waste management and environmental protection.

The report calls for the retirement age to be maintained at 66 and for expenditure on support for the elderly to be increased by 900 million euros in the coming years.

It also recommends an increase of 1.5 billion euros in funding for the early childhood sector to bring it to 1% of national income as recommended by Unicef, and a tripling of public funding for research and development of renewable energies.

The report adds that state spending on higher education should be brought back to 2000s levels of around 1% of national income, with 0.1% of that spending allocated to research.

According to “The Irish State Post-Pandemic” report, the main cause of the shortfall in state revenue compared to high-income European countries is low social insurance contributions, especially on the employers’ side. It calls for the PRSI for employers and the self-employed to be raised to at least 1% of national income.

It also calls for the phasing out of capital gains tax (CGT) relief, updating land values ​​used to calculate local property tax, and phasing out fuel subsidies. fossils.

Fórsa general secretary Kevin Callinan said the report “addresses the challenge” of fundamental reform of state finances to bring Ireland in line with “the rest and the best” of Western Europe in terms of spending on public services and infrastructure.

“This report examines how we should and how we can achieve an expanded state and work towards a first-class social wage supported by a competitive and environmentally friendly economy based on safe and well-paid work,” he said. he declares.