Six changes for an alternative Ireland

If Ireland is to move towards a desirable alternative future, a change in core values will be necessary. By Fr. Sean Healy.

The dominant narrative that underpins policymaking and public discourse in Ireland is deeply flawed. A narrative in this context sets out how we explain ourselves to ourselves and others. It addresses key questions of how we got to be in the situation we’re currently in, where we are now, our vision of the future and how we can reach that desired destination.

A more accurate and appropriate narrative for Ireland would include the following six key propositions.

1. Ireland’s policymaking for more than a decade was guided by many false assumptions concerning economic growth, taxation, services and infrastructure. Among these were:

  • Economic growth was good in itself and the higher the rate of economic growth the better it would be for Ireland. Whatever supported economic growth was to be facilitated. Whatever limited economic growth was to be resisted. The promotion of growth as an end in itself became the focus of policy.
  • The benefits of economic growth would trickle down automatically. Everyone would benefit.
  • Infrastructure and social services at an EU-average level could be delivered with one of the lowest total tax takes in the EU.
  • The growing inequality and the widening gaps between the better-off and the poor that followed this approach to policy development were not important as everyone was gaining something.
  • Low taxation was good.
  • Reducing tax rates would lead inevitably to an increase in tax take.
  • Giving people back their own money, through reducing taxes, was far better than investing that money in developing and improving infrastructure and services. The sum of people’s individual decisions would produce far better results for Ireland than allowing government to decide how best to use the money.
  • Ireland had a great deal to teach the rest of the world, particularly about how it could reach full employment, generate huge economic growth and provide for all the society’s needs while having one of the lowest total tax takes in the western world.

 

2. Many policy failures arose from these false assumptions. Among them were:

  • Failure to take action to broaden the tax base or to promote tax equity.
  • Failure to overcome infrastructure deficiencies, such as broadband, public transport, primary healthcare, water, energy, social housing and waste.
  • Failure to adequately address high energy costs or to promote competition in sheltered sectors of the economy, such as professions.
  • Failure to appropriately regulate the banking and financial services sector or to manage the growth of personnel numbers in the public service.

 

3. These and similar policy failures produced much of the current series of crises that Ireland is facing – banking, public finances, economic, social and reputational.

4. These crises are being exacerbated by persevering with failed policies and false assumptions. Principal among these are an insistence by government that:

  • Ireland’s total tax take must remain as one of the lowest in the EU.
  • The economy should have priority over all else.
  • Preventing all the major banks from collapse is the top economic priority.
  • Cuts in public expenditure are the key. (These are important but only part of the solution).

 

5. Ireland needs a new vision. Four core values that should underpin a guiding vision for Ireland are: human dignity, sustainability, equality/human rights and the common good. Ireland needs to see these values at the core of the vision of its future as a country where:

  • Every man, woman and child has what is required to live with dignity – ie has sufficient income, access to the necessary services and is actively included in a genuinely participatory society.
  • Sustainability (economic, social and environmental) is a central motif in policy development. This would mean that: international economic competitiveness is developed and sustained; economic development, social development and environmental protection are seen as different sides of the same reality, all interdependent.
  • Balanced regional and global development would be at the heart of the vision of Ireland’s future.
  • Equality and a rights-based approach are at the core of public policy.
  • The common good is a constant goal of policy development.

 

6. Policy priorities for moving Ireland towards a desirable alternative vision include:

  • Raising Ireland’s total tax take in a fair and equitable manner while keeping Ireland a low-tax economy (ie below 35 per cent of GDP which is the cut-off level provided by Eurostat for a low-tax economy).
  • Providing the necessary resources over time to raise Ireland’s infrastructure and social services at least to the EU-average level.
  • Focusing economic growth on increasing per-capita National Income.
  • Reforming the public service to ensure it maximises its capacity and delivers appropriate outcomes.
  • Ensuring Ireland’s economy is internationally competitive.
  • Addressing the reality of unemployment for both short-term and long-term unemployed people.
  • Continuing to reduce poverty with a particular focus on reducing child poverty.
  • Developing long-term planning and ensuring all actions taken serve the long-term needs of society.
  • Tackling inequality and developing a rights-based approach to policy development.
  • Ensuring that getting value for money is the norm where public expenditure is concerned.
  • Minimising the exposure of the taxpayer to the losses incurred by banks and the expenditure of taxpayers’ money on rescuing these.
  • A commitment to reach the 23 high-level goals set out in Towards 2016.

 

Fr Seán Healy is director of Social Justice Ireland, whose socio-economic review for 2010, An Agenda for a New Ireland, examines 12 policy areas – taxation, income and poverty, work, education, health, rural development, sustainability and environment, housing, public services, participation, migration and the Third World.