PPF will not narrow the growing gap between rich and poor

 

As evidence mounts that Irish society is facing a growing problem of social inequality, it is disappointing to find the latest agreement between the Government and the social partners failing to name and address all the challenges involved.

The Programme for Prosperity and Fairness, which employers and workers alike are voting on now, contains lengthy sections on social inclusion and equality. These outline objectives such as reducing poverty, providing an adequate income for all citizens and offering supports "for groups experiencing disadvantage and inequality".

In concrete terms, £1.5 billion has been pledged for social inclusion measures, over and above commitments already made in the Budget and the National Development Plan. Commitments to publish a Disability Bill and to enact the Equal Status Bill within the lifetime of this programme have been given.

The equality authority will provide additional support to groups such as older people, travellers, lesbians and gay men, people with disabilities and women. Measures to increase access to the labour market for the long-term unemployed and people experiencing disadvantage will be determined, with targets set.

These are real achievements, and much of the credit must go to the negotiating skills and determination of the community and voluntary sector representatives at the table.

These measures, along with taxation changes and extra wage increases for the low-paid, will benefit some of the poorest in Irish society. So we can hope that by the end of this agreement in 2003 there will be fewer poor people in society. But this is as far as the programme goes.

Nowhere is there any recognition that the gap between rich and poor has been growing. Addressing this, the community and voluntary sector fought hard for a new way of determining social welfare rates by linking them to 50 per cent of average income and raising them in line with these. Such a link would help reduce the rich-poor gap, yet decisions on this substantial measure have been resisted, and instead the issue is to be considered by a working group.

Reducing poverty and addressing social inequality are two separate issues. Those in poverty can have some of the worst aspects of their situation ameliorated while the gap between them and the better-off grows wider and wider. Recent ESRI figures illustrate well how this is happening in today's Ireland as they show that the top wage-earners have achieved the highest increases since the late 1980s.

It needs to be recognised that percentage wage increases are going to widen this gap, as unions representing the low-paid are only too well aware. Flat-rate increases could have been used as a tool to deliver a better deal for the low-paid, and to reduce the gap at the same time. Alongside this, the wealthy continue to see their tax burden fall, thus ensuring that wage increases benefit them far more.

This raises the issue as to whether growing inequality should concern us at all. In other words, can we build an inclusive society, as the PPF seeks to do, while neglecting the growing gap between rich and poor? As Prof Brian Barry of Columbia University pointed out recently: "A government professing itself concerned with social exclusion but indifferent to [income] inequality is, to put it charitably, suffering from a certain amount of confusion".

This confusion derives from the failure to acknowledge that social cohesion is put at severe risk when the incomes of the rich grow so great as to lose touch with average incomes in society.

Some theorists in Britain are taking this phenomenon seriously enough to suggest that there needs to exist some ratio between the incomes of the richest and the poorest if the foundations of society itself are not to be undermined. Ratios of six to one and eight to one have been proposed; in Ireland it has been estimated that the ratio is more than 24 to one.

Instead, the Government's priorities are revealed in its resistance to the proposal by the community and voluntary sector for a universal childcare payment that is taxed. Despite intense debate over recent years about the need for affordable childcare, the programme has left this unresolved.

The proposed measure, if adopted, would represent a step towards a more egalitarian society because it would not only reduce the gender inequality gap, but would do it in a way that would provide more resources to those who have the least.

While we agree with the Tanaiste's recent statement that childcare tax allowances do not benefit the less well-off (Irish Times, February 25th) the current tax and social welfare reforms will not provide enough childcare support for the low-paid and the poor.

Also revealing a lack of Government commitment to equality is its inconsistency on the issue of "individualisation". Whereas it has shown strong commitment to introducing into the taxation system the principle of equal treatment of women and men, it resisted the decision to implement automatic separate and equal payments for them within the social welfare system.

Social welfare payments to two-adult households are almost always paid to the man only unless the woman is receiving payments in her own right, or asks to have them split.

Despite its aspiration towards fairness, therefore, this programme has an insufficient understanding of what might constitute a fully inclusive and equal society. There is no mention of socio-economic inequality, and so far the Government has opposed several measures that could be significant tools to reduce these core disparities.

Overall, the Programme for Prosperity and Fairness sets itself far from ambitious goals. This, at a time of historically high economic growth and growing evidence of serious problems of social division in society, is hardly promising. Key issues have been postponed, innovative social reforms have been resisted and there has been a deafening silence on growing income inequality.

The programme is devoid of any hint of the principle that the wealthy in society, who have gained so enormously over the past decade, should bear a greater burden of responsibility for reducing inequality. This kind of solidarity will be required if we are effectively to address growing social inequality, and to ensure that the objectives of economic success will not take precedence over the objectives of building a more just society.

Dr Katherine Zappone is a former chief executive of the National Women's Council and a director of An Cosan, a community-based organisation in west Tallaght. Peadar Kirby is a lecturer in Dublin City University; his doctorate, for the London School of Economics, examines the links between economic growth and social inequality in Ireland's recent development