Ireland has choices to make. The current level of investment is so low that economic and social stability are being threatened. The fiscal space that will be available to Government under current plans will go nowhere close to providing the financing required. The resources and the capacity exist to build a fair and just future for everyone in Irish society, but these resources are not currently being mobilised.
The Programme for Government of the 32nd Dáil should be focused on delivering five key outcomes: a vibrant economy, decent services and infrastructure, just taxation, good governance and sustainability. These five areas of policy need to be addressed urgently if Ireland is to move towards being a society characterised by solidarity and fairness. They are interdependent and should be addressed simultaneously.
Decent services and infrastructure, just taxation, good governance and sustainability are essential if the economy is to be stable and vibrant, and grow in a way that is suited to the development of a society characterised by justice, equality and well-being.
To achieve such outcomes a strong focus on investment in infrastructure and services is required. New research from Social Justice Ireland shows that the lack of investment in housing, health, childcare, rural broadband and education threatens economic growth and stability.
Ireland’s level of normal investment as a percentage of GDP has been low by EU standards for several years and is far too low for a recovering economy. Such a position cannot be allowed to continue. The funding requirements for our infrastructure and services should be benchmarked against the funding in those countries we aspire to emulate and compete with.
In reality, Ireland’s level of investment is too low to provide the housing, the services and the infrastructure that Irish people need.
While the number of people employed has been growing and the numbers unemployed have been falling, which is very welcome, the level of poverty has grown, long-term unemployment has become a permanent feature of the landscape and there are huge deficits in areas such as childcare, healthcare, social housing, rural broadband and adult literacy.
If Ireland is to provide decent services and infrastructure for all its population, then a step-change is required in the country’s level of public investment.
If the fiscal parameters imposed by the EU are rigorously maintained and we don’t get a break that would reduce our debt, then some of this investment will need to be provided ‘off the books’. Otherwise, we are likely to see an escalation in the current levels of homelessness, poverty and exclusion and a continuation of the problems in healthcare and other areas already mentioned.
To secure a vibrant economy and to provide decent services and infrastructure it is essential to have a total tax-take closer to the EU average. It is not possible to provide EU average levels of services and infrastructure with US levels of taxation. Ireland can never hope to address its longer-term deficits in infrastructure and social provision if we continue to collect substantially less revenue than that required by other European countries.
Ireland’s total tax-take should rise to 34.9 per cent of GDP, the Eurostat threshold for a low-tax country. Social Justice Ireland has proposed a range of initiatives to achieve this target including the introduction of a minimum effective corporate tax rate, the introduction of a Site Value Tax and a Financial Transactions Tax.
Ireland’s failures in the governance area have been well documented and commented upon in recent years. Failures in regulation contributed hugely to the economic crash of 2008. Failure to address the issue of windfall profits following planning changes, as recommended in the Kenny Report more than four decades ago, has contributed hugely to the current housing crisis.
The Dáil has not seen genuine debate on many Government Bills. Most people feel they have little or no influence in shaping many of decisions that affect them directly. Reform is required.
Sustainability must also be at the core of any solutions proposed. All policy proposals should be economically, environmentally and socially sustainable. Policies that don’t meet these conditions should not be chosen. Of particular concern in this context is the issue of carbon emissions and climate justice. To ensure that all policies are sustainable in this way requires that Ireland adopt new indicators to measure progress.
Broken societies are bad for business and bad for citizens. The country needs a Programme for Government focused on delivering a vibrant economy, decent services and infrastructure, just taxation, good governance and sustainability.
Seán Healy is Director of Social Justice IrelandSocial Justice Ireland which has published its Annual Socio-Economic Review, ‘Choices for Equity and Sustainability’ on Friday, April 15, 2016