This uncertainty arises, on the one hand, as described above, from the fact that the depth and duration of the crisis are unknown and, therefore, also the extent to which it will be necessary to use fiscal policy. On the other hand, the structural balance is not an observable variable; its magnitude depends on the calculation of aggregate potential output, and the usual difficulties determining the level of the latter have been multiplied as a consequence of the crisis. That said, an approximate calculation of the magnitude of the structural deficit post-crisis can be made based on its estimated level in 2019 (3.1% of GDP). To this amount would need to be added certain structural spending introduced in recent months, such as spending on the health system, some of which is likely to have a structural component, and on the minimum income scheme, as well as the extra interest burden arising from the higher level of debt. In addition, according to the estimates available, around 1 pp of GDP would need to be added in each of the next three decades for the increase in pension spending as a consequence of the decision to return to consumer price indexation. The result is a structural deficit of not less than 5% of GDP, although as I have said this figure is surrounded by high levels of uncertainty, given the lack of precision with which the effects of the crisis on potential output can currently be measured.
These include a broad range of tax rate reductions, exemptions and deductions that, ultimately, reduce revenues significantly and introduce distortions that contravene the principles of efficiency and fairness. 3.4  Population ageing and pension system reform  One factor that makes it all the more necessary to reduce the vulnerability of public finances in Spain is the challenge of population ageing. The large projected increase in the dependency ratio over the next 30 years will give rise to a very significant increase in public spending on pensions, health and long-term care. Consequently, a crucial aspect of the medium and long-term budget plans is the sustainability of spending in these areas. 32  In the specific case of the pension system, recurrent deficits have been recorded in recent years. In its recent recommendations, the Toledo Pact Commission emphasises that the social security system currently bears burdens for which it should not be responsible and therefore it proposes transferring them to the State. In addition, the AIReF has proposed transferring some of the social contributions currently allocated to the National Public Employment Service to the social security system. These measures seek to significantly reduce the social security system’s deficit, at the expense of the State deficit.