The rate and scale of population growth is an issue that preoccupies policy-makers. Understandably so. It has important consequences for demand for services such as education, health and housing. It has an equally significant impact on the available workforce and by implication the State’s ability to raises taxes to pay for services now and in the future.
In theory Ireland has a fair wind behind it in trying to match demand for services with the ability to raise revenue. Its relatively young population combined with significant inward migration has seen tax revenues swell. However, the failure to anticipate the demands this put on services and infrastructure has created significant problems and fuelled discontent in many quarters.
As a State, Ireland needs improved planning and that includes having a better handle on population dynamics. The Department of Finance is the latest body to gaze into its crystal ball and take a stab at how demographic trends will unfold over the short to medium term.
Their projections or “scenarios” are not markedly different to those of the Central Statistics Office and the Economic and Social Research Institute. They all expect the population to reach between 5.5 million and 7.5 million by 2065, depending mainly on migration trends. The Department’s central forecast is a population rising to 6.8 million, from 5.28 million now.
Such forecasts are by their nature imprecise but one thing on which they all agree is that the rate of natural increase – the excess of births over deaths – will taper off as the population ages and without inward migration to compensate the country will start to experience a shortage of workers.
The Department of Finance projects that if there was no net migration – in other words if emigration and immigration were at the same level – the labour force would start contracting by 2035.
These projections come with many caveats, but it is important to note that 2035 is well within the planning horizon of the State. The current housing strategy runs until 2030 and the longer term national development framework extends to 2040. Metrolink, the ambitious rail project for Dublin, is due to commence operation in the first half of the 2030s.
The successful implementation of these plans requires continued inward migration, which is an increasing fraught political issue. Managing this in a society already bursting at the seams will not be easy, but tighter restrictions on inward migration across the board would limit growth.
There is clearly a balance to be struck. And a key challenge for the Government and its successors is to underline the importance of inward migration to Ireland’s economic and social development, while working to deal with the consequences of a rising population.