Rory Hearne: TASC has produced a new report (Towards Cherishing All Equally: Five Proposals for a New Programme for Government) outlining five policy proposals that could address some of the economic inequalities in Ireland. It is hoped that those involved in forming a new government, and those with a role as a responsible opposition, will find these useful. What is revealed by our analysis of the key indicators of economic inequality (see Chart 1) is that deep seated inequalities exist in Ireland.
Ireland’s economic model – that is, the economic assumptions that underlie our economic decisions – leaves many without sufficient to eat, without a permanent home and without hope. Gross income inequality, for example, has worsened during the recovery. Irish citizens also lack many of the protections offered by more developed welfare states such as support for early education and childcare, after school care and services for those with disabilities, universal health care, and extensive and affordable public transport.
Chart 1 Key indicators of economic inequality in Ireland
There are strong economic arguments as well as those based on social equity to seek to make Ireland significantly less economically unequal. Recent research highlights the destabilising impact of growing inequalities on economic performance and societal well-being. TASC has consistently made the case for a strong ‘social economy’ which would see the economy embedded in a society whose democratic institutions promote the full development of human potentials and capacities.
This report makes the case for a reinvigorated social and economic agenda to address economic inequality in Ireland. Chart 2 provides an outline of this agenda. The objectives of the new Government should include this framework.
Chart 2 A social and economic agenda for economic equality in Ireland
TASC is making five core proposals to address the long standing inadequacies in our social infrastructure and in how government develops and implements integrated policies. These proposals include:
1. An Equality Mandate for the Irish Fiscal Advisory Council
The Government should broaden the remit of the Irish Fiscal Advisory Council to address the social policy implications of its advice, having regard to the objective of reducing wealth inequality and poverty and including an equality and gender proofing of the annual government budget. This should also include costed options prior to budget preparation to enable public discussion.
2. A New Civil Society and Inequality Agency
Create an ‘Independent Civil Society Agency’ (ICSA) with dedicated funding to enable a renewed civil society to emerge and which would in particular include sufficient funding for the remaking of ‘Community Development Programmes’, thereby enabling civil society and disadvantaged groups (particularly women, those in poverty, lone parents, migrants, Travellers) to have a voice in the policy formulation concerning them.
3. A Living Wage
Legislate for a living wage (currently estimated to be €11.50 per hour compared to the minimum wage of €9.15 per hour). The Low Pay Commission should be given the responsibility of establishing and updating the living wage – an hourly wage that provides employees with sufficient income to achieve an agreed acceptable minimum standard of living. Ensuring sufficient hours of work needs to be included also.
4. An Enhanced Public Investment Plan
In order to reduce inequality and provide a social recovery and sustainable economy, a significant increase is required in public investment in areas such as housing public transport, hospitals, schools, regional infrastructure, child care, elder care. This has been outlined in TASC’s recent report A Time for Ambition including a substantial increase in capital infrastructure investment. We also propose the establishment of a Housing and Homes Agency to lead investment in social and affordable housing (using NAMA), implement regional rent control schemes, introduce the long overdue 1974 Kenny Report and address disadvantaged communities and homelessness. This would also encompass a new Spatial Strategy to ensure regionally balanced investment.
5. Ireland’s place in a Social Europe for its Citizens
Ireland’s place is firmly in Europe but Europe needs to return to being a social Europe for its citizens. The ECB needs to be reformed to widen its remit to focus also on unemployment and growth and there is a need for flexibility in the Growth and Stability Pact Fiscal Rules.
It is positive to note that the trend in public opinion in recent years in Ireland, and reflected in the recent General Election, indicates that Irish people increasingly want to see accessible and high quality universal health care, education and other key public services and they see these as a priority over tax cuts. A recent Eurobarometer poll, for example, showed that people’s main concerns in Ireland are housing (34%), health and social security (29%) and unemployment (32%), with tax much less of a concern (9%).
It is also significant and very welcome that virtually all political parties and alliances in their general election manifestos acknowledged the need for a fairer Ireland to emerge from our recent crisis.
We can learn from other countries like the Nordics (Denmark, Sweden, Finland) that economic inequality is not inevitable and can be significantly reduced. They are small open economies like Ireland but they provide much higher quality public services, a higher standard of living, and are much more equal. To achieve this, adequate taxation to pay for good social services such as affordable childcare, top class health services, free education etc., is regarded as essential rather than as a “burden”. They point to the need to join the dots between taxes, public services, family needs and the cost of living as well as the adequacy of income.
Policy choices not only at budget time, but in terms of overall political objectives, need to work hard to arrest and reverse to a significant degree the serious problem of economic inequality in Ireland.
You can read the full report here.
Fergus O’Ferrall, The Flourishing Society, TASC, 2012.
Nat O’Connor and Cormac Staunton, ‘Cherishing all Equally: Economic Inequality in Ireland’, TASC, 2015.
Paul Sweeney, A Time for Ambition: Ensuring Prosperity Through Investment, TASC, 2016.
Dr Rory Hearne is a Senior Policy Analyst at TASC.