A basic income could do much to eliminate the poverty trap

THERE is something badly wrong with the Celtic Tiger

THERE is something badly wrong with the Celtic Tiger. There are more people with incomes below the poverty line in Ireland today than there were a decade ago, 34 per cent compared to 30 per cent. Of that number 15 per cent live in grinding poverty, yet the proportion of the national cake going on social welfare is lower now than it was a decade ago.

There was a welcome increase of 45,000 in the number of jobs in the Irish economy in the past year, yet the number of unemployed fell by only 900, while the number of long term unemployed fell by just 300. (These statistics are measured on a labour force survey, as the Government favours.)

There are more than 33,000 families on waiting lists for housing, an increase of 40 per cent in five years. Between 3,000 and 4,000 young people leave school every year with no educational qualifications.

A recent OECD study concluded that up to 26 per cent of young people have qualifications which are of little use in the labour market. Rural exclusion and urban deprivation continue to be major realities, as does our two tier healthcare system. This list may be exhausting, but it is not exhaustive.

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The major issue in the first half of the election campaign was tax. Ireland is a lowtax State when compared to other EU states, yet parties competed with each other about how best to reduce taxes further while the reality of poverty and exclusion has been placed on the backburner. Despite the rhetoric, tax reduction does not help 30 per cent of the population. They are too poor to pay tax.

One of the key problems to be addressed in the years ahead is the widening gap between the poor and the better off, which has caused a polarisation in society. Deeply divided societies are unstable. It is in the interests of all, not just of poor people, that these gaps be reduced. With its rapidly growing economy, Ireland has more than enough resources to tackle these gaps and reduce these divisions. Consequently, choices made in the general election on Friday are crucial.

We need a team of politicians with vision, energy and skill to lead us into the 21st century. We need men and women who have the courage to recognise the problems of our present reality, especially of the third of our people who find themselves untouched by the prosperity of the Celtic Tiger.

We need people who can challenge us all to envisage a future which is both viable and desirable, and in which this growing division and exclusion would be eliminated.

A major concern for developing a vision and making choices regarding development policy should be promotion of the common good. Much of the commentary on social and economic policy today reflects the tension between the philosophy of self interest and the philosophy of the common good.

The theoretic bankruptcy of self interest philosophies, combined with the social and environmental destruction caused by policies based on these philosophies, is encouraging some opinion formers and policy makers to take a new interest in the philosophy of the common good as the most viable way forward. The common good is not, however, being given the prominence it should have, either by opinion formers or policy makers. It, too, has been missing from the election campaign.

The current economic boom provides a unique opportunity to shape a society where everyone will have a meaningful place. This opportunity could easily be wasted. To ensure it is not wasted, the incoming government should give priority to:

. ensuring every person receives sufficient income to live life with dignity.

. ensuring meaningful work is available to everyone seeking it.

. developing inclusive decision making structures to ensure all are heard.

. tackling the twotier nature of much of our social services.

. and developing new indicators and indices of progress to ensure that economic growth is used to build a genuinely progressive society.

Poverty can be eliminated: it's a question of choices. The present tax and social welfare system has worked well for decades, providing security to the most vulnerable in our society. However, the world for which it was designed no longer exists. Great changes which have taken place in our work patterns and in our way of life had made it obsolete. That is, why poverty persists despite economic growth.

We need a new approach, one which will eliminate poverty and unemployment traps, which will always make it worthwhile for a person to take up a job or work an extra hour and which treats men and women equally. We need a system which exchanges the safety net, which no longer works, for a springboard, which will allow individuals to develop their talents and workskills in a way that will enable them to help themselves and society generally.

We need an approach that reverses the current enforced dependency which accompanies so much of the existing social welfare system.

INTRODUCING a basic income system would achieve all of these desired effects. It is workfriendly while being efficient in labourmarket terms. It eliminates traps and promotes equity. It ensures everyone receives at least the poverty level of income, while spreading the burden of taxation more equitably. It treats men and women equally, while being simple and transparent.

It rewards work in the social economy, work which is often ignored, and it faces up to the challenges of the global economy.

A basic income system could be introduced over the term of the next government. It could be done with reasonable tax rates and without damaging the economy in any way. It can be afforded and it would be real progress. The alternative is to persist with an outdated system which will continue to fail our people.

We need a new system to ensure that poverty, unemployment and exclusion are eliminated for ever before we enter the new millennium. Basic income is such a system.