No doubt our problems are taxing – but then so are the solutions
IT IS time we had a conversation in Ireland about the type of society we are and the type of society we want to become because we are rapidly becoming a society of left-behinds – and we’re running out of time to change it.
Figures recently published by the Central Statistics Office revealed that one-in-six people in Ireland is at risk of poverty, while one-in-five children is living in households that are at risk of poverty.
While unemployment has decreased in recent years and now stands at 6.1pc, this reduction masks the problem of underemployment – the 116,000 people who are working part-time and would prefer to be working full-time hours.
Precarious employment is a massive issue, particularly for younger workers. Unable to rely on guaranteed hours, every month is a stressful struggle to try to meet mortgage payments, rent, childcare costs and bills.
There are 160,000 people, 8pc of the workforce, now living like this. More than half of these are in temporary employment, unable to find permanent positions. That is a staggering increase of 179pc since 2008.
While the Government likes to tell us that our economy is now consistently the fastest growing in Europe, ordinary workers have not experienced a boom in their pay packets or living conditions.
In late 2015, a study by the Nevin Economic Research Institute revealed that 50pc of those with a direct income in Ireland receive less than €20,000 a year, 80pc have annual incomes of less than €50,000 while the top 5pc of earners, the top 100,000 in the State, get more than €85,000.
Collectively, the poorest 60pc of households receive almost an identical share of income to those in the top 20pc – around 40pc. Meanwhile, the top 10pc of the population receive almost 25pc of total income while the bottom 10pc share just 3.5pc.
Is it any wonder then that as the rents rapidly rise beyond the reach of people living at the margins, an ever increasing number of people are entering homelessness?
Last month, almost 500 children in Ireland became homeless. That is 18 children a day.
When will we say “enough”? The Government is insisting that its Rebuilding Ireland strategy is working, and it will just take time. But the figures tell a different story, and the figures don’t lie.
A status update, published by the Department of Housing in January, showed the delivery of a promised 1,000 rapid-build houses was almost 80pc behind schedule – a comprehensive failure that is almost impressive in its magnitude.
Meanwhile, the most recent figures for social housing provision in 2017 revealed that only a third of the promised number of units had been constructed by October – 809 out of a target of 2,054.
A €200m Local Infrastructure Housing Activation Fund, a grant for developers to help them start construction in return for the provision of social and affordable homes, is now four times oversubscribed – with €800m being sought and €226m approved.
Despite its apparent popularity, there is little evidence the scheme is going to have any impact, with some developers getting cash from the State without first agreeing to provide homes as a quid pro quo.
In short, the Government’s housing policy is a mess. It has been for years, and there are no signs that things are going to get any better any time soon.
The only winner that has emerged from any of this is the country’s biggest landlord, Irish Residential Properties (REIT), which has just announced a 38pc increase in its annual profits – from €47m to €65.1m.
Is this the sort of society we are trying to build from the ashes of the one that was destroyed in a property collapse 10 years ago – one in which 500 children become homeless every month while a property investment fund enjoys windfall profits?
A new report from Social Justice Ireland wants us to think about this question and then consider that there may be another way – a way for us to create a fairer, more inclusive society in which sustainable jobs support workers from every demographic, not just those at the top.
Social Justice Matters is not some kind of communist manifesto. It merely suggests that people in this country should have the ability to live with some semblance of dignity – with an income that is sufficient to pay rent, public services that support people when they need them and a minimum standard of living below which we will not allow people to fall.
To achieve this, the report’s authors say that, contrary to Fine Gael’s tax-slashing mantra, we need to raise an extra €3bn in tax a year.
Before you recoil in horror at the prospect, this does not have to be done by gouging middle-earners.
What if the Government imposed a minimum effective corporate tax rate – which meant multinationals doing business here had to pay at least 10pc tax. Doesn’t sound too onerous does it, given our corporate tax rate is supposed to be 12.5pc? Yet, despite this headline rate, the Public Accounts Committee heard last year that eight of the top 100 multinationals, with the highest taxable income in Ireland, had effective tax rates of zero. A further five had an effective rate of 1pc.
Consider that you, if you earn the average industrial wage, are paying a higher tax rate than these firms and then consider if that is fair.
THERE are other suggestions in the report – Ireland should join with the 10 other EU countries who are introducing a financial transaction tax, a minimum effective tax rate for high earners, a windfall tax for those who benefit from rezoning decisions, the imposition of a tax on vacant homes and the move from a minimum wage to a living wage, among others.
These are ideas that deserve to be debated – not simply shot down by politicians who want to mischaracterise them as juvenile or zany or dangerous.
Now is the time to decide. Do we want to live in a society where the only guarantee is that the rich will get richer?
Or do we want to live somewhere where everyone is afforded an opportunity for a better life? It’s your decision.
Consider that you – if you are earning the average industrial wage – are paying a higher tax rate than multinationals, then consider if that is fair