During the past fifteen years, social spending by Government has fallen from 33 per cent of GNP to about 24 per cent today - one of the lowest levels in the EU. The economic hair shirt that was applied to drag us out of recession and spiralling public debt in the late 1980s, is still largely in place, in spite of transformed economic circumstances and spectacular growth levels for the past five years. The result manifests itself in an increasingly unequal society, as those lucky enough to enjoy high earnings, wealth and property are rewarded by lower taxes, while public spending that would benefit the least well off, remains constrained.
Nobody would advocate a return to the profligate spending and taxation policies that nearly sank the economy and led to gross tax evasion in the 1980s. But simple equity and self-interest would urge a change in emphasis in existing taxation and social policies so as to underpin democracy and to create a more inclusive, caring and vibrant society. The belttightening measures of the recent past affected the poorest sections of society most severely. It is now time to address that situation and to begin to shape the kind of society we wish to see develop in the new millennium. If we do not, the consequences were identified by the World Bank when it stated: "growth leads to less poverty reduction in unequal societies than in egalitarian ones."
The Combat Poverty Agency published a book, "Rich and Poor, Perspectives on Tackling Inequality in Ireland" during the week, designed to stimulate public debate on these issues. Eight leading social economic commentators, researchers and policy makers have contributed to the volume. And while they recognise that expenditure has increased in areas like educational disadvantage, social welfare, health, childcare, housing and disability services, they argue that much more needs to be done. Urging the adoption of an active policy of redistribution, it lists in order of priority for Government action: increases in social welfare payments, higher tax credits, increasing standard rate bands, lowering the standard tax rate and, last, lowering the higher tax rate. It also urges reform of the PRSI system.
Irish policy-makers were found to have consistently prioritised the needs of the economy over social objectives. And the study argued for a more equal distribution of income, wealth and of resources such as education, housing and health as essential requirements for tackling poverty and for creating a more just society. As Sister Stanislaus Kennedy of Focus Ireland remarked: "There is something inherently and seriously wrong with a system which, during a time of sustained economic growth also sustains and generates inequality and perpetuates poverty, leaves Ireland as one of the most unequal States in the EU."
Economic growth has brought major benefits to this country. Fewer people live in poverty, unemployment has fallen below four per cent and about 1.7 million people are now at work. For all that, the gap between rich and poor has widened and continues to grow. It is time Government took stock and addressed that situation.