The Minister for Finance, Paschal Donohoe TD, published a report Population Ageing and the Public Finances in Ireland highlighting the likely economic and budgetary impacts of Ireland’s rapidly aging population over the coming decade and how reform is “absolutely necessary”.

The report notes the demand for demographically sensitive public expenditure such as health and pensions grow, with significant costs for the State.

Significant structural reforms are detailed as being “absolutely necessary” to meet the costs associated with population ageing in the Minister’s press release. Analysis in the report suggests that without structural reform, a large deficit will emerge, and the debt ratio will move onto an unsustainable path.

The report suggests reforms such as linking the State pension age to life expectancy could significantly reduce the cost burden. The window of opportunity to address the budgetary implications of Ireland’s pension provision is said to be rapidly closing, and any delay will inevitably raise the fiscal cost of population ageing.