A REPORT FROM the European Commission been critical of Ireland’s overspending in the health budget and said the government needs to do more to tackle high levels of unemployment in the country.

In the report released today, the commission points out that even though Ireland has a relatively young population, public healthcare expenditure was among the highest in the EU in 2012 and significantly above the EU average of 7.3 per cent.

“Given the current difficulties in managing the health budget, expected demographic pressures due to an ageing population mean that current service levels can be maintained only if value-for-money gains are achieved over the medium to long term,” it said.

Unemployment

The report says Ireland faces challenges relating to unemployment, particularly long-term and youth unemployment. It notes that there is still a large working age population with low skills “resulting in inequality and skills mismatches”.

“Long-term unemployment has fallen gradually with the recent strengthening of the labour market, but it remains high and continues to increase as a proportion of overall unemployment, representing over 61 per cent of the total at the end of 2013,” it says. In terms of Ireand’s training for jobseekers, the commission said there is a need to cover all young people in need within a four month period.

Sharp reminder

Reacting to the report, Fianna Fáil finance spokesperson, Michael McGrath, said it was a “sharp reminder of the many economic challenged facing the country”.

“We lost 5,000 jobs in the retail sector in the last three months and the domestic economy remains on the floor. The Department of Finance figures demonstrate negligible progress in tackling the most difficult mortgage arrears cases,” he said. “Health spending on agency staff is going up at the same time as the Government are taking medical cards from very sick children.”

All of this has led to an acute sense of frustration on the part of the public as was demonstrated in the strong vote against the Government last week.

Recommendations

The commission said that the programme’s targets need to be supported by specific measures from 2015 onwards.

There have been significant steps to improve important aspects of the Irish fiscal framework and the quality and timeliness of data provision.

However, medium-term budgetary plans are not supported by well specified adjustment measures and are subject [to] revisions at the time of annual budget decisions. The medium-term expenditure ceilings are not sufficiently constrained by legally binding specific adjustments.

It recommended that the government fully implement the 2014 Budget and ensure that the correction of the excessive deficit in a sustainable manner by 2015. After this correction, a medium-term objective of at least 0.5 per cent of GDP each year should be set.

Reform of the healthcare sector is also among the recommendations and the pursuit of further improvements in active labour market policies with a particular focus on the long-term unemployed and low-skilled, as well as young jobseekers.

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