The challenge for the social partners is how to fund the changes needed to improve our quality of life, writes Sean Healy. A CORI analysisshows that Ireland's total receipts from tax and social insurance are the lowest in the EU when measured in GDP or GNP terms
The past decade has seen Ireland's per capita income rise rapidly to a point where it is now far above the EU average. In terms of income we are one of the better-off European countries. Evidence of this is all around us as we see record levels of personal expenditure and huge increases in people's disposable incomes.
Ireland's infrastructure and social provision, however, is another story. While there has been substantial progress on a range of fronts, we still lag far behind the EU average in areas of infrastructure such as housing and public transport. Likewise, we are a long way behind the European average in areas of social provision such as healthcare, education and social welfare.
This anomaly has, for the most part, been a product of Government decisions taken in annual budgets since 1997. In that period the Minister for Finance has consistently highlighted the Government's priority to "give people back their own money".
This has meant that cutting taxation has been the principal priority of this Government and, according to a recently reported statement of the Minister for Finance, Mr McCreevy, it will continue to be its top priority in the years ahead. In this process, those who were better off to begin with were the major beneficiaries of the growth of the Celtic Tiger economy.
The end result is that a person who had an annual income of €50,000 six years ago and benefited from national agreements and tax cuts in that period has €15,000+ more a year in disposable income than he/she had back then.
While reflecting on the Government's largesse, people in this category may well have to spend three hours or more in a traffic jam every day going to, and returning from, work. These people may also have to pay well in excess of €250,000 for a starter house in a location many miles from their place of employment.
There is little likelihood that the public transport system is adequate to bring them from home to work and back. The healthcare service is so undependable that they will spend substantial amounts of money on private health insurance in case of illness. There is no guarantee that the local school is not rat-infested or that its plumbing is adequate.
And, if people in this category should ever have the misfortune to become unemployed, the level of social welfare payments they receive will be far below the poverty line.
These people may have more money in their pockets but are they better off socially, psychologically, personally?
These are the choices Government has made. This situation raises serious questions about the Government's bona fides on the issue of building a fairer and more inclusive society.
In summary the situation is that:
Ireland's per capita income is well above the EU average while its infrastructure (e.g. housing, public transport) and social provision (e.g. healthcare, education, social welfare) are well below the EU average.
If Ireland is ever to have EU levels of infrastructure and social provision, it must move towards a tax-take level closer to the EU average.
Those advocating a tax-take substantially below the EU average have been constantly challenged to explain how they propose that Ireland provides EU levels of infrastructure and social provision without EU average levels of taxation. No explanation has been forthcoming. Consequently, one is forced to conclude these groups are not prepared to support the investment required to ensure the country's infrastructure and social provision reach EU average levels in the foreseeable future.
A major question for society at this time concerns whether or not Irish people want an EU average level of infrastructure and social provision. I believe the answer to this question is Yes. Most political parties and social partners also answer this question in the affirmative.
The challenge, however, is in answering the question: how are such improvements to be financed?
The Government's response suggests it has no intention of tackling deficits. Its response to this challenge is to dodge the question.
A CORI Justice Commission analysis published today shows that Ireland's total receipts from tax and social insurance (post-Budget 2003) are the lowest in the EU when measured either in GDP or GNP terms.
They are at least 7.5 percentage points below the EU average when measured in terms of GNP. Britain is much closer to the EU average, being only 3.8 percentage points below the EU average.
If Government is to regain credibility in this situation, it must spell out in detail how it intends to honour the commitments it has already made on poverty and social exclusion.
The Government's recent decisions in areas such as social welfare, community employment, social housing and medical cards have cast serious doubts on its real commitment to bring Ireland's infrastructure and social provision up to EU levels. This in turn has major implications for the current social partnership negotiations.
For a national agreement to be credible in the present situation, it must place special emphasis on securing three key components, i.e., economic development, social equity and sustainability (social and economic as well as environmental sustainability).
Some of the required improvements can come through ensuring that we get value for money spent in these areas, but that alone will not be sufficient.
Additional investment is required to bring both infrastructure and social provision up to EU average levels. That requires additional taxation.
A new national agreement needs a guiding vision that sees Ireland matching the EU on quality-of-life issues such as housing and public transport, education, healthcare and social welfare. Such a vision would be deliverable within a definite timeframe.
The challenge for Government and social partners is to identify how it is to be funded and implemented.
Dr Sean Healy, s.m.a., is director, CORI Justice Commission. CORI, which represents more than 135 religious congregations with 12,000 members in 1,400 communities throughout Ireland, is a social partner and is involved in the national partnership talks.