THE DEPARTMENT OF Finance has forecast a budget surplus of €65 billion over the next four years thanks to exceptional corporate tax revenue. There is a way to spend this windfall that has been proven to enhance the well-being of the Irish population.
The growing field of well-being research has begun to identify the factors that contribute to the happiness of populations. This emerging blueprint for national well-being offers Ireland the guidance it needs to invest its windfall wisely.
We are starting from an exceptional place. Ninety-six per cent of Irish people say they are very or fairly satisfied with their lives today. That is one of the very highest figures in the world. Yet Ireland is one of Europe’s fastest-growing nations and we are rapidly ageing. Our windfall is an opportunity to invest in future-proofing the nation’s happiness.
The research identifies the need for adequate income security against unforeseen difficulties. Ireland’s social assistance is comparatively generous and, combined with our progressive taxation, does more to reduce income inequality than that of any other country.
Our ageing population, however, requires some of our bonanzas to fund far greater expenditure on pensions in the coming decades.
A good quality and easily accessible healthcare system also engenders national well-being. Again, Ireland does well on this measure with only 2% of us reporting an unmet need for medical care – similar to the EU average – and, once in hospital, 82% of patients rate their experience there as good or very good.
But healthcare demand is set to grow strongly as more of us live longer and carry excess weight that will morph into health problems in later life. Investment in expanded care is essential.
A healthy natural environment lifts happiness levels. Superficially, Ireland scores well on this with its low levels of air pollution and easily accessible coastal and rural landscapes. However, our greenhouse gas emissions are amongst the highest in Europe per capita, our forestation levels are lower than everywhere except Malta, and our habits and water bodies are in severe decline.
Investment in boosting our natural capital isn’t an optional extra.
A strong sense of community is important, and the Irish are a very trusting lot. Three-quarters of us agree that most people can be trusted, a level that is behind only the Finns and the Danes. Our housing crisis poses a threat to this, though. If a large section of society is unable to secure a good quality home to rent or purchase, then it undermines their faith that we are working together for the common good. Continued long-term investment in house building is essential.
Higher levels of education are associated with better health and happiness. Thankfully, the Irish are amongst the best-educated people on the planet. More than half of all working-age adults have completed some form of third-level education – something that is true of only a handful of countries.
As technology contributes to an ever-more rapid pace of change so the requirement for lifelong learning will continually increase. Furthermore, government investment in third level remains well short of what it was before the Great Recession despite the fact that student numbers have significantly increased. The government now spends half as much on each student as it did 15 years ago.
Given the criticality of the country retaining a competitive edge for inward investment, and the benefits for society at large, restoring the previous level of investment is a no-brainer.
Making these investment decisions will increase national well-being at a time of continued growth. But so much better if we can generate new income streams to sustain this beyond the next four years. Investing some of our monies productively could leverage our additional educational capability and encourage entrepreneurship through seed capital and business development supports, providing a longer-term return to the exchequer.
So what shouldn’t we spend the money on? Paying down the national debt or saving it for a rainy day isn’t going to generate any greater life satisfaction for people in the near term. Tax cuts such as abolishing the USC, or additional cost of living supports such as electricity credits, provide a short-term boost in happiness but little long-term payback.
Even improving public transport does not deliver added well-being unless it results in a meaningful reduction in commuting time. The money is better spent elsewhere.
The return on this investment can be measured. Ireland is amongst a few global leaders whose national statistics agencies have developed a ‘Well-Being Framework’ to track citizens’ well-being. Although Ireland is a relatively equal country, the assessment identified several cohorts experiencing inequality across a range of indicators.
The needs of women, single-parent households, lower income households, people with long-term sickness or disability, immigrants, and those in rented accommodation will require special consideration in the deployment of our well-being windfall.
In our first century as an independent nation, we built a Republic that is citizen-centric and concerned with our well-being. We have never been healthier, wealthier, better educated, or happier. Of course, there are deep challenges facing us today – there will always be – but we have an opportunity to learn from what has worked here and elsewhere in creating an even better place to live in our second century.
Dr Mark Henry of Technological University Dublin is the author of ‘In Fact: An Optimist’s Guide to Ireland at 100’.
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