Tuesday, 14 April 2015

Shining a light on alternatives

Cormac Staunton: Two important recent announcements by Government signal moves towards addressing some of the causes of economic inequality in Ireland: free GP care for under 6’s and over 70’s and the introduction of 12 months paid parental leave (to be split between couples).

These initiatives signal an approach towards more universal public services in Ireland. On their own they do not fully address the problems. In fact in some ways they may raise more inequalities. It’s as if we are moving the country from driving on the left to driving on the right, but are doing so in a phased manner – trucks first, then a few weeks later bikes ... then eventually we’ll get to cars.

But if these moves are first steps and an indicator of the direction of public policy, then they are very welcome. At the very least, more discussion of initiatives like this should show the madness of calls for income tax cuts as a way to solve social problems and reduce rising economic inequality.

Parental Leave
The introduction of  a 12 month state maternity/paternity payment to be split between both parents as they see fit is an interesting move. However, if we assume that employers will not suddenly give paid paternity leave, nor extend their current paid maternity policies (where they exist), then there will be a big financial cost to the family of taking this up.

In some cases the mother and father may both take 6 months – either concurrently or consecutively. If neither parent is receiving a salary (or a portion of their salary) during that time then the cost to the family is quite large. Only those with considerable savings or independent wealth would be able to take it up.

As such I predict the take up will be lower than expected. Men who don’t get paid leave from their employer are unlikely to take more than a few weeks unpaid leave even if they are in receipt of state payments. Mothers may extend their maternity leave from beyond the current 26 weeks, but this will depend on a range of factors including; the cost of childcare, the maternity payment offered by the employer, and whether the new payments are sufficient to make it affordable.

An 11 month/1 month mother/father split would be a step up from what is currently available. But it wouldn’t solve the fundamental problem of the high cost of day-care after the first year and before the child starts school.

As such it is unlikely to solve the problem of the high cost of childcare for families with young children, which causes many women (and some men) to leave the labour force.  If the government is serious about tackling this issue it needs to do more than just the cheapest option, and look to invest in subsidised childcare for all families.

Free GP care for Under 6s and Over 70s
While this is also positive, again it must be part of a move towards universalism of primary care, not just a once off move. On its own it creates further tiers in our already deeply divided health system. Now a child of five from family on high income gets free GP care, but a child of six from a family on modest income does not.  Also it is important to note what is not covered by this: medicines, X-rays, blood tests, and A&E visits.

If we are going to provide free GP care (not just visits) then far better for it to be for all children, and indeed for all citizens, rather than for some. A move such as this would reduce inequalities in health and would reduce out-of-pocket costs for all families - particularly for those on low incomes.

Of course the main barrier to extending universal healthcare and childcare is: funding.  Neither of these options is ‘cheap’ for government, but nor are the costs prohibitive.  Many countries provide these services either free at the point of use or with small user charges.  They can afford to do this not because they are wealthier than Ireland (we are still a high income country) but because they make a political decision to do so.

In Ireland we have so far prioritised giving income tax cuts rather than increasing investment in these services (as happened in Budget 2015). The alternative would be to give people a choice: they may pay more in taxes, but they win significantly with better and cheaper public services when they most need them.

But we are continually told that there is no alternative. We are told that tax cuts are for the good of society. Neither of these is true.

These steps towards universalism show us what alternatives look like, but they need to be followed through if they are going reduce economic inequality. Doing it halfway means we have trucks driving on right, and cars on the left.

Cormac Staunton is Policy Analyst at TASC. You can follow him on Twitter @Cormac_Staunton

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