Over the next few weeks, the Government will be putting the finishing touches to Budget 2020. Everybody knows that the budget will be framed in a context of profound anxiety – as the Fiscal Advisory Council dryly put it, "the current outlook is unusually uncertain".
On October 8th, when he unveils his plans, Paschal Donohoe, like almost everybody else, will be in a Brexit state of mind. The immediate future is full of the known unknowns of our neighbour's existential crisis and the collateral damage to Ireland that can be guessed at but not entirely foreseen.
Faced with such unpredictable but almost certainly unpalatable economic and fiscal developments, caution and prudence are the general watchwords. But prudence is not about doing nothing. It is about making every cent count.
The overwhelming evidence is that the best way to do that is to make it count for children.
The big question for the Minister for Finance and for the Government is this: if you have a modest amount of money to spend, do you spread it out very thinly so that everybody gets a little something? Or do you concentrate the limited resources you have on doing one big thing that you know will have good long-term effects for society, for the economy and for fiscal stability?
Spread thinly, the budget will be not so much trickle-down economics as trickle-away economics
The first option is the easy one and therefore the one that governments in similar circumstances have tended to take. But it dilutes the effects of public decision-making. By the time a modest amount of money is spread around, it feels, for most of those who receive it, relatively insignificant. It doesn’t make much difference.
Fiona Reddan, writing in The Irish Times this week, suggested that the overall expectation is that "this year's budget looks to be distinctly lacklustre". And if the usual approach is followed, it will be.
The Government is expected to spend €88 billion in 2020 but Donohoe has a “fiscal space” of just €700 million for tax cuts and/or extra spending. To put that in context, it is about the amount of money that the Department of Health overspent on its agreed budget in 2018.
So, if it is spread thinly on small changes to tax bands, tax credits and the universal social charge along with small increases across the range of government departments, it will merit (and most likely receive) a shrug of the shoulders. It will be not so much trickle-down economics as trickle-away economics.
Alternatively, the Government can do something meaningful and exciting that has the merits of combining social justice with fiscal prudence. It can make a good start on a long-term strategy to get rid of the single biggest waste of human and financial resources: child poverty.
The evidence from every developed economy shows that child poverty doesn’t just create misery and social squalor. It is immensely expensive: money not spent on giving every child a decent start in life returns tenfold to haunt public expenditure in the form of lost productivity and tax revenues and of vastly increased spending on health and crime.
Even modest spending now, if it is properly planned and based on evidence of what works, can make a huge difference for the future.
There is no bad time to begin this effort, but this year is especially propitious. We are in the centenary year of the foundation of the first Dáil in 2019. That assembly grasped the urgency of prioritising the welfare of children, declaring in its Democratic Programme:
“It shall be the first duty of the Government of the Republic to ... secure that NO CHILD shall suffer hunger or cold from lack of food, clothing, or shelter, but that all shall be provided with the means and facilities requisite for their proper education and training as Citizens...”
This is why The Irish Times took the initiative, in co-operation with the Children's Rights Alliance, to launch the No Child 2020 project. It takes these promises of basic decency for children in relation to food, shelter, education, health and citizenship and identifies the first steps that are required from Government if they are to be fulfilled.
Individually, these steps are relatively modest and undoubtedly affordable in Budget 2020. But collectively they can make an immense contribution to the development of a fair society and a sustainable economy.
The most basic of these proposals is food. Just over one in ten households with children in Ireland experiences food poverty or insecurity. This means that almost 80,000 households with children under 18 years cannot afford a meal with meat or a vegetarian equivalent every other day; are unable to a afford a weekly roast dinner; or miss one substantial meal.
This affects everything, from the ability to learn and grow, to long-term health, to people’s sense of dignity, to the comfort and security of family life. The first vital step for Budget 2020 is to begin a scheme of small grants for schools, childcare facilities and youth centres to have kitchens on site so that, over time, every child can be guaranteed a hot, nutritious meal every day.
The estimated cost of this initiative is €114 million.
In relation to children’s health, there is a glaring anomaly: children living in consistent poverty do not necessarily qualify for medical cards. Free GP visits are, from this year, available to children under 12 – a very positive step that will make a real difference.
But older children are not covered, and the scheme does not cover other costs such as hospital visits, prescriptions and medical appliances. The medical card, which does cover these things, has an income limit that has not changed since 2005: to qualify for a medical card, a family with children under 16 can have a gross weekly income of no more than €266.50 plus €38 for each child – a threshold that excludes many children living in poverty.
The cost of rolling out medical cards for all children living in consistent poverty is less than €126 million.
The problems of homelessness obviously run very deep and are especially acute for the almost 4,000 children whose rights to play, study, have friends and enjoy a family life are profoundly disrupted. The budget, in itself, is not going to transform this situation, and child homelessness cannot be addressed on its own.
Here, the priority is to enshrine in law the needs of children in overall responses to the housing crisis. Legislate to ensure that decisions about where to accommodate a child take into account whether the accommodation is near a child’s school; how long they might have to travel to get there or whether the accommodation has enough space for a baby to crawl and learn to walk.
The legislation should put clear time limits on the use of emergency accommodation for families with children.
In the field of education, there is a huge gap between Ireland’s constitutional commitment to provide for free primary education and the reality experienced by families. Parents and guardians have to cover the basic costs such as books, workbooks, uniforms and so-called “voluntary contributions”.
The Irish League of Credit Unions reports that one-in-three parents is getting into debt to pay for school costs. In some respects, this is the most baffling of all failures in Irish social policy – it would cost a mere €103.2 million annually to vindicate the constitutional right of all children to free primary education.
To put this in context, this week’s exchequer numbers show corporation tax bringing in €314 million more than had been projected. That unplanned excess alone would pay for three years of fully free primary education.
But the actual ask for No Child 2020 is more modest. To make a start, deal with the cost of books: an average of €95 a year for families with children in primary school. Making these books free would cost just €20 million.
Finally, if children are citizens, they have a right to participate in the cultural life of the nation. Every child should have the right to take part in artistic and creative activities. Most children do, but some are excluded by poverty. A report published by the Arts Council and the Economic and Social Research Institute in 2016 found that children and young people from disadvantaged backgrounds are less likely to participate in arts and cultural activities than children from better-off families, and that cost is a key barrier.
These measures are modest, sustainable and likely to produce far better returns than any other programme of public investment.
The No Child 2020 proposal is for a Culture Card to be issued to every child with €30 on it, to be used for access to an arts or cultural event. The cost is €36 million.
All told, these measures would cost around €296 million – less than half the available “fiscal space” and less than half the typical annual overrun in the health service. They are modest, sustainable and likely to produce far better returns than any other programme of public investment.
Yet taken together as the beginning of a long-term, coherent attack on child poverty, they would form a children’s budget with the potential to transform not just the lives of vulnerable young people but the way in which the Republic lives up to its own foundational values.
Being in an uncertain time is not an excuse for turning away from those values. It is all the more reason why the State must remind itself of what it is for and why it exists.