SPECULUM VERUM
A meteorite of the demographic crisis is flying at us - that's how Sławomir Dudek, president of the Institute of Public Finance, commented on the latest OECD analyzes presented in the review of the Polish economy in 2023 r.
The OECD makes it clear, that an aging population puts enormous pressure on public finances. In one of the scenarios, it may cause an unlimited increase in state debt, np. to almost 140 proc. GDP in 2050 r. At present, Poland's debt amounts to approx. 55 proc. PKB.
These dark visions for Polish finances were drawn with assumptions, that the state, on the one hand, responds to the needs of an aging society, on the other hand, it does not make any changes in other areas of its policies. This means that pension costs are increasing, for care, health and education of the elderly, and expenditure related to retirement poverty.
As pointed out by the OECD in its report, so-called. replacement rate, that is this, what percentage of your last earnings will be the pension, is to be one of the lowest among OECD countries in Poland. To ok. 35 proc., while the average may exceed 60 proc. The fact, that politicians usually do not remain indifferent to the "starvation" benefits of the elderly, is confirmed, for example, by the policy of the PiS government, That is 13. i 14. retirement or better, than it would result from the provisions of the method of valorization of benefits.
Also assumed in this scenario, that the state does not reduce any of its other expenditures (np. for defense or public safety) and does not make any changes on the income side, which results in significant losses in tax and contribution revenues.
The OECD also outlines other possible paths for the future. For example, if the state tried to compensate for the costs of an aging population, np. increasing taxes and contributions, debt could remain more or less at the same level as at present.
In the reform scenario, public debt in relation to GDP may even decrease. The OECD recommends such reforms as extending the retirement age to 67 years for men and women, increasing the professional activity of the society or deregulation and digitization of the economy, to accelerate the rate of economic growth.
Which of these scenarios is the most likely? – Everyone is possible, depends, what actions we will take,” comments Łukasz Kozłowski, chief economist of the Federation of Polish Enterprises. - The most important thing, to start discussing it now. And it transcends political divisions, because the demographic crisis in the horizon of two or three decades is a fundamental challenge for public finances, and for the economy,” emphasizes Kozłowski.
As it reminds, According to the forecasts of the working group on. aging at the European Commission, already about 2055 r. number of working people, i.e. paying taxes and contributions, will be equal to the number of people over the age of 65 lat (then it can be even lower). - Not so long ago, three "contributors" provided benefits to one person on a retirement or disability pension. In about three decades, we'll get to the state, when this relationship will be one to one - warns Kozłowski. If then the income of the pension system were to fully cover the expenses, premiums would have to be several times higher, which would be an unbearable burden for the working people.
Recipes up for grabs
How to meet such challenges? Experts will try to answer this question at the Monday debate "Round Table - Demographic Challenges" organized by the Federation of Polish Entrepreneurs. The discussion is to focus on areas, which are key to mitigating the effects of the demographic crisis.
On the one hand, it is about extending the professional activity of older people. The former would be possible as a result of extending the retirement age, but since no political group wants to take up the topic at the moment, there is nothing to cheat, that it will happen.
In the short term, the easiest way to implement it would be to increase the activity of the society in general, especially people 50+, by popularizing flexible forms of work, remote work, part-time, lowering the barriers to taking up work for carers of children and other charges - enumerates Kamil Sobolewski, chief economist of Employers of Poland.
– We urgently need a well-thought-out migration policy, encouraging migrants to social integration, which in the medium term may increase the resources of the labor market - adds Sobolewski. - Concern for the number of people is also extremely important today, i.e. higher fertility, although we can only see the effects in the long term, in two decades at the earliest,” emphasizes Sobolewski.
You have to say it clearly, that in every area of demographic policy it is difficult to count on quick successes - comments Antoni Kolek from the Pension Institute. “But action has to be taken, and very comprehensive, in many fields,” he says. “Let's take, for example, the needs of young people with regard to the increase in fertility rates,” Kolek points out. As indicated, monetary allowances are not enough (That is 500+), you need to think about increasing the availability of housing, access to well-paid and development jobs, sense of security for pregnant women, etc.