Coalition ‘creating a fractured society’

The Government has been accused of effectively turning a recession into a depression by steering the biggest ever transfer of wealth from low and middle income families to the rich and powerful.

In a, attack on Coalition economic policy, Social Justice Ireland said it was not acceptable that the sacrifices OF building the future should be borne by those on low to middle incomes or future generations.

“What Government is doing is creating a fractured society, a weak economy and persistently high un-employment. This is not real recovery,” said Fr Seán Healy, director of advocacy organisation, Social Justice Ireland, at the launch of the group’s 2013 Socio-Economic Review.

“Government continues to protect the rich at the expense of the rest of us while failing to address issues such as unemployment and emigration.”

The 360-page review — What Would Real Recovery Look Like? — analyses the economic and social challenges facing people and the impact of government policies. It identifies policy priorities that must be addressed if the country is to move towards becoming a just society.

It suggests replacing the social welfare system with a basic income system. It also says the Government should undertake a major investment programme to create jobs.

“Without investment, there will be no jobs,” said Fr Healy. “Without jobs, there will be no recovery. Without recovery, we will be stuck in austerity for the foreseeable future.”

In order to finance these jobs, the report says taxation must rise and that, specifically, effective corporation tax should be a minimum of 10%. Recent Department of Finance figures show that, although nominally in the region of 12%, Ireland's actual rate is closer to 6%.

According to Michelle Murphy, research and policy analyst with Social Justice Ireland, our expectation of public services may be too high for current tax levels.

“Ireland’s total tax take is low by EU standards,” said Ms Murphy. “If Irish people wish to have infrastructure and services at EU-average levels then we must realise these cannot be delivered by American levels of taxation.

“Ireland’s total tax take is simply too low to pay for the infrastructure and services necessary to ensure human dignity for all. Tax increases should, however, be implemented in a fair and equitable manner.”

The report also advocates a social impact assessment prior to agreeing fiscal adjustments under the EU bailout programme.

Fr Healy said that, under current government policy, the fear was that recovery will be characterised by gains in wealth for the few and stagnation of living standards for the many.

Key points

* Major jobs investment programme, targeting youth unemployment;

* Capital investment in transport and renewable energy;

* Replace social welfare with basic income system to guarantee a minimum income for all;

* Make third-level students pay fees, financed by loans contingent on future earnings;

* Increase taxes overall to 34.9% of GDP, broaden the base and make it fairer;

* Ensure effective corporation tax is 10% minimum;

* Raise Ireland’s 0.1% GDP spend on pre-primary education closer to OECD average of 0.5%;

* Restructure health budget, giving greater priority to community care.