Budgets are about governments' vision of the sort of society they want. What is required to transform our society is the political will, writes Seán Healy
All the hoopla surrounding the Budget each year tends to obscure a most important fact - that decisions are underpinned by a vision of the future of Ireland that guides Government policy.
In its annual Budget Government allocates resources to move Irish society in a particular direction and towards a particular destination that it believes is desirable.
So it is crucial that in judging a Government's budget decisions, we realise that they have long-term significance and implications far beyond their impact in the following year.
Looking back on Ireland's development over the past decade, there is a wide range of positive developments that can be highlighted. The economy is in excellent shape. Unemployment has fallen dramatically while the numbers employed have grown steadily. House-building has reached record levels to a point where almost one-third of all the homes in the country have been built in the last 10 years.
Net emigration has been replaced by net immigration. Ireland's per capita income has risen dramatically to a point where we are one of the wealthier countries in the world.
However, there are two kinds of problems. Firstly, those who have benefited from the growth of the Celtic Tiger find themselves facing questions concerning their quality of life. They feel under increasing stress, work longer hours, commute to and from work for much longer periods, have less time to spend with their families and so on.
These are important issues and they are addressed constantly in the media, in political discussion and in many other arenas. This discussion is most welcome. The quality of life being produced for people is a crucial measure of whether or not the country is really making progress.
But there is another Ireland, an Ireland that was lost in the Celtic Tiger years, an Ireland that was left behind as many people thrived, an Ireland that has benefited little from the huge economic growth of the past decade.
There are more than 700,000 people at risk of poverty in Ireland today. What does this mean in reality? According to the Government's National Anti-Poverty Strategy (NAPS): "People are living in poverty if their income and resources [ material, cultural and social] are so inadequate as to preclude them from having a standard of living that is regarded as acceptable by Irish society."
People are at risk of poverty when their income is below €182.30 for a single person or €418.30 for a family of four in 2004 terms. More than a quarter of a million children live in such households. About 420,000 of those at risk of poverty are in households headed by someone who is not in the labour force (i.e., they are elderly, ill, have a serious disability or are in caring roles).
More than 175,000 of those at risk of poverty already have a job but their incomes are very low. These are the working poor. Only 7.3 per cent of those at risk of poverty live in a household headed by a person who is unemployed.
Any vision of the future of Ireland must ensure that this core issue is addressed. Budget 2005 can go some way towards addressing this issue by raising the lowest social welfare rates by €14 a week for a single person and €24 a week for a couple. This increase would be focused on the 420,000 people identified above who are dependent on social welfare.
To address the problem of the working poor, tax credits should be increased substantially. Widening the standard rate tax band would give nothing to this group, as it would be of benefit only to people with incomes above €28,000 a year.
But income alone is not enough. According to the Government's own description of poverty, other resource deficits must also be addressed. In this regard priority should be given to increasing the resources available for increasing the stock of social housing.
There is need for a new fund to resource organisations in the community and voluntary sector providing services in local areas. They used to depend on community employment schemes. As the numbers unemployed have decreased, the number of places on these schemes has also declined. A new fund could go some way towards tackling the current shortfall in resources for these organisations.
Poverty is not the only issue. The need for fairness in the overall tax system is accepted by most Irish people. A meaningful move towards securing a fairer tax system would be the standard rating of all tax expenditures. While more would be required to achieve a truly fair system, a move along these lines would be a down-payment on a fairer future in the tax area.
The vision of the future that should guide Government's Budget decisions this year should be one where Ireland's infrastructure and social provision deficits are addressed. On both counts Ireland has some way to go before we reach the EU-15 average. Most Irish people would want us to have EU-15 average levels of infrastructure in areas such as transport, telecommunications, regional and rural development and EU-15 average levels of social provision in education, social welfare, healthcare and disabilities.
Substantial progress can be made towards eliminating these deficits without any significant increase in the total tax-take.
After all, Ireland's current budget is in very strong surplus every year. Gordon Brown, the British Chancellor, has a "golden rule" that requires him to balance the current budget over the economic cycle.
A similar approach in Ireland would provide the necessary resources to tackle the deficits while remaining within prudent fiscal parameters.
A Budget focused on addressing these deficits would have widespread support. What it requires is political will.
Seán Healy SMA is director, CORI Justice Commission