Budget Perspectives 2012 Conference

The Economic and Social Research Institute (ESRI) and the Foundation for Fiscal Studies (FFS) are holding the 14th “Budget Perspectives” Conference on Thursday 13 October 2011, from 08.30 to 13.00, at the ESRI, Whitaker Square, Sir John Rogerson’s Quay, Dublin 2. 

Programme 

08.30 Registration and coffee.

08.55 Welcome: Frances Ruane, Director, ESRI

SESSION 1

Chair: Frances Ruane, ESRI.

09.00 “Taxes, Welfare and Work Incentives”, Tim Callan, Niamh Crilly, Claire Keane, Áine Ní Shúilleabháin, John R. Walsh (ESRI).

09.40 “Macroeconomic Context for Budget 2012”, Joe Durkan, David Duffy, Cormac O’Sullivan (ESRI).

10.10 ‘Fiscal Policy: Panel and Discussion’, John McHale (NUIG and Irish Fiscal Advisory Council), Philip Lane (TCD and IIIS), John FitzGerald (ESRI).

11.00 Tea/Coffee

SESSION 2

Chair: Mary Walsh, FFS.

11.20 “The Performance of the Irish Health System in an International Context”, Michael Borowitz, Valerie Moran, Mark Pearson (OECD).

12.00 “The Health Care System in Ireland: Controlling Growth in Expenditure and Making the Best Use of Resources”, Charles Normand (TCD).

12.40 Discussion 

13.00 Close Please find below short embargoed summaries of three papers to be presented at the Conference, with contact details for the appropriate author. Conference papers and presentation slides will be available to download from our website on the day of the event. For further information on the Conference please visit our website. Members of the Media are invited to attend the Conference.

Embargo: 00:01 a.m. Thursday 13 October 2011 “TAXES, WELFARE and WORK INCENTIVES” By Tim Callan, Niamh Crilly, Claire Keane, Áine Ní Shúilleabháin, John R. Walsh (ESRI). 

Work does pay better than welfare New research finds that 8 out of 10 unemployed people would increase their income by at least 50 per cent if they were to obtain a job. 6 out of 10 would more than double their income if they could find a job. These results refute the impression created by selected non-typical examples that most unemployed people are “better off on the dole”. The analysis is based on the ESRI’s tax-benefit model, which uses a nationally representative sample of real people rather than selected examples. The model simulates the welfare entitlements and tax liabilities of each household in the CSO’s Survey on Income and Living Conditions. This comprehensive approach finds that about 3 per cent of the unemployed would have a lower income in work than out of work. Potential entitlements of unemployed people to Rent and Mortgage Supplements are taken into consideration – but latest figures show that only 13 per cent of those on Jobseeker Assistance or Benefit receive Rent or Mortgage Supplement. These results also take into account the age and educational qualifications of the unemployed – so that their potential earnings are likely to be below average. Between 2000 and 2008 income tax rates were cut and credits were increased. Consequently the public finances became highly dependent on revenues from sources related to the bubble – such as stamp duties and capital gains taxes. Since 2008 taxes on those in employment have been increased sharply in an attempt to rebalance revenues. The net impact has been that a substantial proportion of all workers face significantly higher marginal tax rates in 2011 than they would have under simple indexation of 2000 policy in line with earnings growth:

• About 1 in 6 workers faces a marginal effective tax rate which is 10 percentage points higher in 2011 than under the 2000 regime.
• A further 1 in 4 workers faces marginal effective tax rates which are between 5 and 10 percentage points higher than under 2000 policies.

Speaking at the conference, Professor Tim Callan said “Income-related taxes – such as the Universal Social Charge – have done most of the heavy lifting in raising revenue. Future tax policy needs to look at taxes which are less directly linked to income, but still have regard to ability to pay. A property value tax could be designed to meet this criterion.”

 

Embargo: 00:01 a.m. Thursday 13 October 2011 “THE PERFORMANCE OF THE IRISH HEALTH SYSTEM IN AN INTERNATIONAL CONTEXT” By Michael Borowitz, Valerie Moran, Mark Pearson (OECD).

Irish Health System Improving but Could be Better Value for Money Health outcomes have improved significantly in Ireland, partly due to rapid increases in health expenditure prior to the economic crisis. However, an OECD review of the Irish health system shows that it could be more effective – improving outcomes further at no additional cost. Ireland’s health spending has increased more rapidly than other countries in recent years and is now on a par with the OECD average of 9.5% of GDP, up from 6.1% of GDP in 2000. Life expectancy has risen considerably and infant mortality and cardiovascular mortality have declined significantly. However, important gaps remain in the quality of health care. Too many people are treated in hospitals for diseases that should be handled by primary carers and deaths due to breast and cervical cancer are high relative to other countries. Rates of smoking and alcohol consumption are among the highest of all OECD countries, which will lead to many preventable early deaths. The Irish health system is currently inequitable and inefficient. The new government intends to move towards the model of competing insurance providers. This can increase equity in access to health care, but there is no guarantee that it will improve efficiency. There is no ‘ideal’ health system among OECD countries; rather, what matters is how well a system is managed. OECD recommendations to improve efficiency and value for money in Ireland include:

• To reduce unnecessary hospital costs, reorient primary care to ensure better prevention and care coordination for chronic diseases.
• Improve hospital efficiency by concentrating services and expanding activity-based payments such as DRGs.
• Allow essential pharmaceuticals to be dispensed outside hospital settings, especially for chronic diseases, using generic drugs at internationally competitive prices.

Embargo: 00:01 a.m. Thursday 13 October 2011 THE HEALTH CARE SYSTEM IN IRELAND: CONTROLLING GROWTH IN EXPENDITURE AND MAKING THE BEST USE OF RESOURCES By Charles Normand (Trinity College Dublin)

Public expenditure on health services in Ireland represents a quarter of all government spending, and has grown rapidly over the last decade. Growth in spending has not brought a proportionate increase in the availability and quality of services. This paper draws on evidence from Ireland and abroad to understand better why this has occurred, and considers how the health sector might address growing demands for services within available resources. Public funding has remained at around 80% since the 1980s, and the share of private insurance has been around 8%. What is unusual in Ireland is that private insurance covers nearly half of the population for some services, and that most people pay out of pocket for primary care. These structures have unintended and in some cases undesirable effects on choices made by patients and service providers. Improving efficiency in the use of health service resources requires changes in who is entitled to what. The paper reviews evidence on the scope for greater efficiency (and suggests that significant improvements are feasible) and reviews the drivers of greater demands. While it is argued that the cost consequences of population ageing will be more limited than widely expected, the fact that the population overall is growing is a source of serious pressures. It is also argued that increased expectations about what should be available will increase demands for care. The current capacity of the health system is limited, and there will be need to invest in better facilities and training. The government has embarked on an ambitious programme of health care reform. The final section of the paper considers challenges that come from the reform process, and how to avoid pitfalls encountered in previous reforms here and abroad.

 

Note to Editors: “Budget Perspectives 2012”, edited by Tim Callan (ESRI), will be published online on the ESRI website at 00:01 am Thursday 13 October 2011. The book includes one paper from the first session, i.e. “Taxes, Welfare and Work Incentives” and the two papers from the second session. There are no papers for the other elements of the first session. Presentation slides will be available to download from our website on the day of the Conference.

Link to Publication details