Maire Geoghegan-Quinn was making a big mistake (August 7th) dismissing SIPTU's tax strategy as "silly season" stuff - that "no-one would ever implement" - but that "keeps the faithful happy". She was also wrong about what exactly our policies are on tax and pensions. On tax she doesn't "hugely disagree" with the goals of "our friends in SIPTU". She says "lower taxes are a good idea" and that "the goal of a 25 per cent flat rate of income tax is admirable", as if these were SIPTU's goals - but they're not.
SIPTU's goals on tax can be summed up as "equity" or "fairness". This means, first, raising enough through taxation to pay for the quantity and quality of social and public services needed in a modern economy and civilised society - not a huge problem at present. It also means raising that money in a way that is scrupulously fair - basically, in accordance with people's ability to pay. Which still is a problem.
To the extent that taxes can be lowered, without endangering our ability to pay for the better health, social and other services we all want, SIPTU is saying, lower them first for the people who are presently shouldering too big a burden: the low- and middle-income PAYE earners; the women whose husbands are social welfare recipients and whose small earnings can be taxed at 100 per cent and more under the present tax and welfare regime; the young, single workers who still enter the tax net at £100 a week; the many people still earning less than the promised minimum wage, who pay a hefty chunk of tax each week; the worker on average industrial earnings, who still pays tax at the top rate.
Maire Geoghegan-Quinn praises Charlie McCreevy for having the economy "trundling along nicely" and for having "started to deal with pensions". Can this be the same man who, along with Mary Harney, is intent on cutting taxation by cutting the top rate of tax, rather than increasing tax-free allowances and the standard-rate band?
Cutting the top rate of tax is not a fair or equitable way of cutting taxation because it gives absolutely no benefit to the majority of taxpayers who do not pay at that rate and, even for many top-rate taxpayers, it's less beneficial than raising allowances and upping the standard-rate band.
Now that we have a partial system of tax credits, an increase in the standard-rate allowances (the personal and the PAYE allowances) means an equal increase for all taxpayers. This is a strategy that SIPTU sees as being very fair.
An increase in the standard-rate band also gives all taxpayers an equal increase - but only if they are earning more than a certain amount, which is why SIPTU argues for increasing the allowances as well as raising the standard-rate band.
However, reducing the top tax rate only gives increases to those paying at the top rate - and gives by far the biggest increases to those earning by far the biggest amounts. We don't see that as being particularly fair, so it's at the bottom of our list of priorities.
On pensions, Maire Geoghegan-Quinn gives Charlie McCreevy great credit for "acting with a maturity the public might not expect from politicians". Presumably she's referring to his decision to start funding for certain social welfare and public service pension liabilities (though she doesn't actually say so).
Yes, this decision is admirable and should be welcomed and supported. It's something SIPTU sought in last year's pre-Budget submission (July 1998) when we called on the Government "to establish the new State pension fund immediately". This was on foot of one of the pension board's main recommendations in its May 1998 report, "Securing Retirement Income", which emerged in response to the National Pensions Policy Initiative launched by the then minister for social welfare, Proinsias De Rossa, in February 1997.
SIPTU very much welcomes Mr McCreevy's positive response to the undeniable need - foreseen by others for some years - to start funding for certain future pension liabilities, but to be told that this is some Fianna Fail or Charlie McCreevy "initiative" is really stretching people's credulity - and SIPTU's patience - when in fact it is a somewhat belated response to policy positions advocated by us for quite a while.
Please, Maire, go off to the Court of Auditors and do the business for Ireland there - and stop lecturing SIPTU about tax and pensions policy here.
Rosheen Callender is an economist