The costs to the taxpayer from age-related health and pension spending will increase only modestly by 2050, according to Adele Bergin of the Economic and Social Research Institute (ESRI).
Ms Bergin was addressing the ESRI's annual Budget Perspectives conference. Among the other issues addressed at the conference were a proposal to incentivise increased private pensions, the costs and benefits of tax reliefs and the controversial issue of waste charges.
Delivering a paper written with ESRI colleague Alan Barrett, Ms Bergin said Ireland's tax burden would rise from 29 per cent of Gross National Product (GNP) to 33 per cent by 2050.
"Ireland is in a relatively good position to deal with these challenges, but we need to maintain the current solid public finance base, especially in relation to maintaining contributions to the National Pensions Reserve Fund," Ms Bergin said.
In a separate presentation, John McHale of Queens University, Ontario, said the Government should respond to the pensions crisis by replacing the pensions scheme with one that would be comparable with the SSIAs.
The PRSA scheme was failing due to complexity and inertia. Mr McHale said universal retirement savings accounts could succeed by replicating the incentives of the SSIA scheme.
These included government contributions combined with deadlines for opening accounts and penalties. Such a system would be more likely to gain common acceptance, he said.
Edgar Morgenroth of the ESRI said weight-related waste charges had been successful in reducing waste usage, but he said it was essential to clamp down on illegal dumping if the system was to remain credible.
Mr Morgenroth said waste collection should be undertaken by the private sector rather than local authorities, and defended the waste charges against recent criticism.
"Waste charges are tax deductible, so it is nonsense to argue that charges are double taxation," he said.
However, Helen Johnston of the Combat Poverty Agency said families on low incomes and welfare would not benefit from tax reliefs.
Mr Morgenroth said this arose because waiver schemes were not being fully implemented.
The conference also heard a defence of the ESRI's latest economic forecast for this year. The growth forecast, 5.7 per cent, has been contrasted recently with more modest figures for growth and productivity produced by the Central Statistics Office (CSO).
"The latest CSO numbers suggest that productivity is declining, but we believe it's too early to run with that story. We think growth will remain strong this year and next," Mr Barrett said.
However, he noted the risks to the economy from excessive reliance on construction and on global imbalances.
He also said the Government's future approach to benchmarking needed to change.
"Public sector workers have higher pensions entitlements than those in the private sector and these should be regarded as equal to 20 per cent of total pay . . . We must also champion the idea of flexibility in the labour market. If private sector workers have more risk, then they should be more highly paid."
