Two stark warnings were issued this week concerning Ireland’s coming demographic crunch. One came from Tanaiste and Finance Minister, Simon Harris, and the other from Nursing Homes Ireland (NHI). Notably, neither seemed to have any solution to what is on its way.
Simon Harris gave his warning in an address [1] to the Economic and Social Research Institute in a speech about economic challenges. He said: “In this highly uncertain world, our demographic outlook is clear. From the middle of the next decade, we will begin to age rapidly. By 2050, just 24 years away, Ireland will look a lot like Italy or Japan does today.”
He added: “In such a society, growth will be lower, costs will be higher and the burden on taxpayers – our children – will be immense.”
But then, rather despairingly he said: “There is no way of avoiding that fate and that is why it is so important that we continue to run surpluses and invest in our sovereign wealth fund.” I will come back to this.
Meanwhile, the NHI [2] warned that Ireland is running out of time to prepare for an ageing population. Based on Department of Health figures [3], it projected that the number of people aged 85 and over by grow by 165pc by 2045, just 19 years away, while more than one million will be over aged over 65 by 2030, just four years away.
As at Census 2022, the number of over 65s came to 781,000. By 2042, just 16 years into the future, this figure is set to hit around 1.4 million, a staggering rate of increase.
Commenting on what is happening, Tadgh Daly of the NHI said: “Ireland is sleepwalking into one of the biggest social and healthcare challenges in its history.
“We know exactly what is coming, yet we are still not planning with the ambition and scale required.
His solution is to build the necessary care infrastructure on time, and that is obviously correct.
For his part, Simon Harris is correct when he says, “There is no way of avoiding that fate”, that is, of lower growth, higher costs and a growing burden on taxpayers as a result of demographic change.
Not even higher immigration is the answer, ultimately speaking, because immigrants obviously age as well, it is possible that supply of immigrants will eventually start to dry up in a world that is also ageing, and immigrants, like us, are commonly having fewer children than two children each.
In fact, even under a high immigration scenario outlined by the CSO, 28pc of the population will be aged 65 and over by 2057. Under a low immigration scenario, 31pc will be 65 and over by 2057, not so different.
As at Census 2022, 13.5pc of the population was over 65.
Simon Harris says that by 2050, “Ireland will look a lot like Italy or Japan today”. Today, 29pc of Japanese are over 65, and for Italy the figure is 25pc.
In both of those countries there are far more deaths than births each year. Sometime in the 2040s, we will cross that threshold ourselves.
Notably, Simon Harris said nothing about our fertility rate which now stands at 1.5, well below the replacement level of roughly two children per couple. Short of euthanising everyone over a certain age, there is indeed nothing we can do about population ageing, but by increasing the number of births, we can at least keep a better ratio of young to old people in the future.
No country has yet found a way of significantly increasing its birth rate, but here no effort at all is being made. The issue isn’t even being debated in any meaningful way. Solving the housing shortage would probably help, but ultimately, we need to have a proper national conversation about why so few children are being born. Would Simon Harris care to start it?