Very small changes in the distribution of economic wealth in the Irish economy could help to make the lives of thousands of people less miserable and give families a chance to escape poverty.
Writing in this month's Irish Banking Review, economists, Mr Alan Gray and Mr Ronan Clarke suggest that by addressing issues such as tax anomalies and employment disincentives within the context of a prioritised overall poverty-reduction strategy, the Government could add equality to its achievements on the economic front.
"Such measures may, after all, be a necessary condition of continued prosperity," they state.
Despite record economic growth in the Irish economy, poverty remains a significant problem. And while the benefits of economic growth have been shared in part by the dramatic rise in employment, higher take-home pay, and the increase in average price houses, the economists stress that growing economic poverty highlights the need to attempt a fairer distribution of wealth in Irish society.
They accept that while there are certain constraints in terms of what Government policy initiatives may achieve, to ignore poverty could ultimately undermine the well-being of the economy. The economists offer the Government eight suggestions for consideration.
They suggest it should avoid any fiscal stimulus to growth, advocating some selective increases in taxation and tighter control of public spending to curb inflation. The Government should also seek to avoid the danger of spiralling wage inflation, warning that excessive wage demands from certain groups should be avoided.
They also state that the Government should focus any tax cuts on lower-income groups and make it more attractive for the long-term unemployed to take up jobs. The economists call for a reduction in public expenditure on programmes that benefit higher income earners, such as the remaining tax incentives for property and other investments.
Their paper argues that it is time for the Government to consider proposals for an acceptable property tax to ensure a more equitable distribution of the fruits of economic growth. Other proposals include, active monitoring of the impact of taxation policy, and an explicit policy objective to eliminate poverty.
