Interesting, isn't it, when the Government gets the childcare issue right and trade unionists get it wrong? The Combat Poverty Agency has produced some uncomfortable reading for trade unionists in its analysis of the last Budget. It is hardly comfortable reading for the Government either, making it quite clear that this was yet another Budget for the rich, but let's be generous and get the Government's plaudits out of the way first.

What the Government got right was its doubling of child benefit. Trade unionists and business leaders had been lobbying instead for tax relief for childcare accompanied by a smaller increase in child benefit.

Combat Poverty set out to analyse the consequences had this alliance got its way. Whereas the Government's 50 per cent increase in child benefit benefited each family equally, the trade union/employer alternative would have given the greatest gains to better-off families.

"Such families would get up to £20 per week, as compared to less than £5 for low-income families."

This is simply explained. The more tax you pay, the more tax relief is worth to you. Low-income families pay no tax. The agency's analysis derives from an ESRI model which looks at the effects of tax and welfare changes on a representative sample of households.

Both child support measures would have cost the Exchequer about the same, around £330 million. Had the trade union/employer alliance prevailed, 75 per cent of this would have gone to dual earners with children, whereas they received 32 per cent of the Government's package.

Only 5 per cent of the alliance's package would have been received by the poorest 20 per cent of households, a third would have gone to the richest 20 per cent. On the other hand, the Government's doubling of child benefit was particularly beneficial in percentage terms to the families of the unemployed.

This analysis raises questions about how the trade unions see their role. Many of their members are sole earners, whose families would have been discriminated against by the childcare tax relief. When you consider that discrimination would have come on top of individualisation of the tax code which favoured dual-earning couples, this would have been an extraordinary skewing of tax and welfare in favour of working parents over parents who opt to care for their own children.

On the other hand, the doubling of child benefit goes some way to neutralising the evils of individualisation as originally introduced. It can be seen as beginning a process of replacing the former tax relief for stay-at-home spouses with a more targeted support for child-rearing.

How might trade unionists represent members struggling with childcare costs while remaining sensitive to social equity? Generously paid parental leave and state provision of pre-schools would take the heat off most parents. But since it might encourage parents to stay at home in the early years of their children's lives, employers and unions will hardly unite on this platform.

One swallow doesn't make a summer. So, although the Government got it right on child benefit, this was still a Budget for the rich. According to the Combat Poverty Agency's analysis, "in overall terms, 60 per cent of Budget resources was received by the richest 30 per cent of the population".

That is a sentence that you need to sit and ponder. More interesting questions occur. Simple ones like: "Why?", or "What happened to the social partners after this Budget?", or "Who does the media speak for in this society?" I don't remember any big national debate after the Budget. We would have heard more about it if George W. Bush had introduced such inequitable measures.

Interesting, too, that a state agency published this analysis last month, a good five months after the Budget. Combat Poverty's brief is to promote a more just and inclusive society, but it remains a state agency. If this were the US, there would have been an independent think-tank which would have churned out this analysis on the night of the Budget, and it would have been central to the post-Budget debate. Why not here? Is the ESRI which supplied the model too under-funded to effect this?

The story gets worse. According to the Combat Poverty Agency, the richest 10 per cent of the population received 29 per cent of the money allocated in the Budget, the poorest 10 per cent of the population less than 2 per cent.

How did the Government achieve this? Cutting tax rates explains a lot. The richest fifth of the population accumulated 65 per cent of the gain of the Budget's tax rate reductions. Payback time, certainly, but for whom?

Not surprisingly, the agency concludes that "the rate of poverty will remain high after Budget 2001".

The Budget cut employees' social insurance contributions, too. Cause for universal rejoicing? Perhaps not. In many European countries this is the pool of taxation which funds superior medical care. Why not use the PRSI fund to increase medical and dental benefits, the agency asks, even provide a free GP service?

And the agency didn't think much of lower capital taxes not with "evidence of increasing accumulation of wealth". Cuts in tax rates explicitly favour the most well off, fuel inflation and reduce our capacity to develop public services, the agency bravely comments.

There is a "clear policy choice here" between investing in a better collective quality of life and "short-term tax gains which fuel private consumption among the already well-off in society".

Interesting, isn't it ?

mawren@irish-times.ie