Welfare State may support only middle-class and better off people

A paper released today by Social Justice Ireland says that the current welfare state will support only middle class and wealthy people in the years to come. The paper said the poor are likely to lose out if “challenges facing the welfare state are not addressed comprehensively".

The paper, written by directors of Social Justice Ireland Seán Healy and Brigid Reynolds, was presented at a conference today on The Future of the Welfare State.

UCD Professor of Social Policy Tony Fahey argued that the welfare state is in danger of becoming regressive rather than progressive in the future.

He said that a number of current policies, such as ’tax breaks for a social purpose’ already favour those earning higher levels of taxable income.

He went on to say that in light of the financial crisis “the appeal of market solutions has been dented... and consequently the ground for a stronger public role in welfare distribution is more fertile than it has been for many decades".

Senior economist in the OECD Social Policy Division Dr Willem Adema found that Ireland falls far below the OECD average in terms of money spent on the welfare state (including both public and private expenditure).

Dr Adema analysed the impact of adding private expenditure to public expenditure, in areas such as education, health, pensions, unemployment and social housing. He found that countries such as the UK and the USA closed the gap on countries with a high public expenditure such as Sweden and Denmark, France and Germany.

Fr Healy and Sr Reynolds recommended the followingfinancing strategies to maintain the basics of the welfare state:

•An increased percentage of GDP must be spent on welfare services

•Alternatives to raising taxes must be found to ensure the welfare state is developed in a way that is appropriate for the 21st century.

•Disincentives to employment must be removed.

Healy and Reynolds also argued that responsibility for delivering ‘well-being for all’ must be shared by “individuals, institutions, society at large and governments” and that the poor must “not be the ones to suffer most in the period ahead".

They also warned that greater life expectancy is putting pressure on funding the welfare state and that middle classes may be reluctant to support redistribution, despite “benefitting hugely” from the welfare state.