Tuesday, 14 July 2015

Survey results show Ireland wants a "Social Recovery"

Cormac Staunton: New research carried out by ‘Behaviour and Attitudes’ on behalf of TASC shows that there is strong support for investing in public services over tax cuts in the next budget.  It also shows that the vast majority of the Irish public are in favour of a rise in the minimum wage and that more than three-quarters believe that the minimum wage should be a ‘living wage’. 

As the National Economic Dialogue convenes this week, and as the Low Pay Commission prepares its report, what signals does this give to government in the run up to the Budget and indeed the next election?

Robust survey
The first thing to note is the robustness of the survey. It was carried out by a leading market research company, and took a nationally representative sample over 1,000 adults. The interviews were quota controlled by gender, age and class within each region, to ensure the results correctly reflect the known demographic of the Republic of Ireland. This is the standard that applies to all market and political research.

The questions were also structured in a way so as to get an accurate reflection of people’s feelings and not to be leading: instead of “Do you want more public services?” it was the more specific:
The Government has indicated that it has €1.5 billion that can be used for either decreasing taxes or increasing public spending in the next Budget. To what extent do you agree or disagree with the statement below?
“The government should prioritise investing in public services rather than spending money to cut income taxes”
Dismissing these results because “of course people will say that” would be to misunderstand the public mood in Ireland.

Getting something back
The high support for this statement (69% agree, 40% strongly agree) and the broad support across age, geography and social class shows that the public don’t necessarily view tax cuts as the best way to ‘get something back’.

Our analysis of the last round of tax cuts showed that the tax cuts were highly inequitable. The majority gained less than €5 per week, yet they still face high costs such as school books and transport, visits to GPs, child and elder care and public transport.

Perhaps the results reflect a growing recognition that the government should do more in these areas to reduce the cost of living. For example, the move towards free GP-care for under 6's and over 70's could be extended to all. 

Or perhaps the government could consider bringing childcare costs down to levels in other parts of Europe. This could save families hundreds of euro each month – 'giving back' far more than any tax cut could. It would also have the added advantage of tackling our low employment level, particularly for lone-parents.

Taking the view that people aren’t just thinking of their own pockets, the result could also reflect people’s view that while we are supposedly in recovery mode, we have a health services under strain, a significant housing crisis, and a variety of other social problems that have not been addressed since the collapse. Surely some of the 7/10 Irish people believe we can do more to tackle these before we make further cuts to income tax.

A Living Wage

The other notable result is that there is clearly strong public support (86%) for a rise in the minimum wage. Indeed, it is striking that even though people were told that the Living Wage is almost €3 higher than the current minimum wage, more than three-quarters of people (77%) still said that this should be the new minimum wage.

Increasing the minimum wage of course has many advantages. Ireland’s high level of deprivation (30% of adults) and the gap between a Living wage (based on the cost of living) and the minimum wage shows that we have a problem of consumption among those on low pay. Increasing wages at the bottom will drive consumption in the local economy. Given the maxim that ‘my spending is your income’ this should lead to job creation. This is in stark contrast to unsubstantiated claims of business groups and others that a rise in minimum wages will ‘cost jobs’.

Clear Signals
The results are clear - a robust survey, carried out independently, shows overwhelming support for increasing the minimum wage and prioritising investment in public services over cutting income taxes. 

The government have signaled they intend for a 50/50 split between tax cuts and increased spending in the next budget. The results in this poll show that this needs to be considered carefully becasue the Irish people would like a social recovery, not just an economic one. 

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

No comments: