Friday, 2 December 2011

Child Benefit and our values

Tom McDonnell: As Peadar Kirby said in the blog earlier today:
"Budgets should be seen as opportunities to debate national choices for expenditure and taxation, choices that ultimately involve values about the sort of society we want in the future."

So what do we value in this society? Deeds not words inform us about a person's values. On Monday and Tuesday we will learn the values of Fine Gael and the Labour Party.

The children's allowance was introduced in 1944 by Sean Lemass during the Emergency. It is a valuable tool for dealing with child poverty. The payment is for the child and is intended to deal with the cost of caring for the child.

However it seems that child benefit and the other child related social transfers are now in the firing line. Evidently these are luxuries for the good times. Despite having one of the lowest tax takes in the entire Western world when measured as a proportion of GDP we are told we cannot afford such luxuries. The special interests and their mouthpieces will say that you cannot tax wealth creators (such as themselves). They will bleat that if you put a further 2% tax on those earning over two or three times the average industrial wage the poor gossoons will simply lose the incentive to work. Heaven forbid we would cut back on pension related tax breaks, 80% of which goes to the top 20%.

Child benefit payments are not a luxury. For many people they are simply about keeping above water. Carol Hunt presents an excellent argument here. As Carol puts it:
"I really wish that we lived in a world where child benefit wasn't needed. A country where so many mothers didn't wait for the first Tuesday of the month -- the pain if it falls on the 4th or 5th -- with nothing left in the fridge. Where they wait for the one and only payment that they know they can spend on their child, on groceries, on childcare and other necessities.

I wish we lived in a world where couples split their income equitably, where women's contribution within the home was financially appreciated, where women weren't taking mainly low- paid part-time jobs, where working mothers were supported with subsidised childcare.

But we don't. Instead, we have the blunt one-payment-fits-all child benefit which is meant to give a much-valued nod to the sacrifice and cost of being a parent -- specifically a mother."

Means testing of course has its own difficulties as the Guardian points out here.
- Means-tested benefits are costly to administer and prone to high levels of error. Complexity and stigma reduces take-up. Given the hostility displayed by political parties and the media towards benefit claimants, it's hardly surprising that families are loath to apply for them.One parent told the Child Poverty Action Group: "You're made to feel like you're sponging off the system."

Taxing or means testing child benefit would impact on women's labour force participation decisions. Ireland ranks 74th in the world for female-to-male labour force participation (see page 452 of the World Competitiveness Report here). This places us on a par with Botswana, Mauritania and Peru. We do not have the type of structures in place to encourage women into work that are commonplace in most Western economies, for example free child care facilities. This is a consequence of our low tax regime.

As I said. We will soon find out the values of this Government.


Paul Hunt said...

@Tom McDonnell,

This blast of posts related to the upcoming Budget all present elevant and valid points, but what are they likely to achieve, other than to convince the writers and others similarly disposed of the unchallengable morality and 'rightness' of the case they advance?

They might, in conjuction with all the other noise being made by those in the broad 'progessive-left' church, build enough pressure to detach a couple of Labour TDs from the government camp. Labour is down 2 already and FG one. There may be more defections - and from unexpected quarters, but the Government parties appear determined to stay the course - and they have more than enough 'lobby fodder' to cope with quite a few defections. In addition, it is highly unlikely that the Government will make any major changes to what has been decided at this late stage in the proceedings. I expect it's down to crossing the 'ts' and dotting the 'is' at this stage.

If Labour suffers too many defections all bets could be off, but a minority FG Govt. might try to limp on - and be even less centre-left friendly (and might even attract popular support if it were to tackle some well-organised protectors of privileges in the public and semi-state sectors). But the likelhood is that most FG and Labour backbench TDs have been 'squared' to some extent or other and they'll decide to hang together. The next real test of public opinion will be the Euro and local elections and the hope is that the sunlit uplands might be in sight by then.

I can understand the anger and the desire to make the case for better options - believe me I share it - but I can't see what all this sound and fury is achieving.

I remain convinced that it would be far better to campaign for a rebalancing of the power of Government and that of the Oireachtas to ensure that the required resources are applied to subject Government policies to open and effective scrutiny. Think of the public entertainment it would provide when all the special pleading, woolly thinking, outright dumbass assertions and general BS in many government policy proposals were exposed publicly - and of the general benefit to citizens when they would be forced to drop the nonsense and advance policies in the broad public interest.

The time to make the case is before the final decisions are made behind closed doors. Shouting the odds just before or after the event is totally futile - even it seems to give lots of people a warm and fuzzy feeling.

Tom McDonnell said...

Hi Paul,

We submitted our proposals to the Department of Finance and we were invited to appear before the finance committee. We also presented to other parliamentarians both individually and in groups.

I agree the decisions for Budget 2012 are probably done and dusted. However the policy debate never ends. Budget 2013 is still to be decided as is Budget 2014 etc.

Even if the broad decisions are made, how those 'ts' are crossed, and how those 'is' are dotted can make a real difference to people on the ground.

Also, while the Government do have a massive majority, neither set of ministers can do entirely what it likes without regard to the wishes of the backbenchers.

I agree with you wholeheartedly on the need to reform the Oireachtas. It is not fit for the purpose of holding Government to account or for adequately scrutinising Government policy.


Paul Hunt said...


Thank you. On your last point, I remain convinced that it would be far better to devote effort to changing the way policy proposals are scrutinised, modified and amended before decisions are made. There is scant evidence that all the sound and fury devoted to advocating what decisions should be made makes even the slightest bit of difference when these decisions are made behind closed doors, presented as a fait accompli and with the enabling legislation whipped through the Oireachtas.

But it obviously makes an awful lot of people feel much better about themselves as they highlight their goodness, morality and concern for others. The fact that it doesn't seem to make a blind bit of difference in the policy-making process seems to be irrelevant.

It is a woeful waste of time, effort and intelligence that could be re-directed much more productively. But, of course, if the policy formulation and decision-making process were reformed to allow proper consideration of these proposals and their enactment, perhaps, in a modified form, much of the woolly-thinking and special pleading in which they're often embedded would be revealed. Now we couldn't have that, could we?