Do the Estimates represent a step towards a more sharing, caring Government? A very small one, writes Fintan O'Toole
Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
Mr Micawber's famous formula for the good life in Charles Dickens's David Copperfield doesn't apply to states quite as simply as it does to families. If everything works out according to the plans unveiled by the Minister for Finance, Brian Cowen, this week in his Budget Estimates, the State will probably end up spending a little more than it takes in. But in the overall scheme of things it is easy to assume that the Government is budgeting for happiness. With the Economist Intelligence Unit (EIU) claiming this week that the Republic already has the highest quality of life in the world, how could the promise of a generous, caring Budget next month not shift us up a gear from our present state of bliss to a condition of absolute ecstasy?
There is no doubt that the Estimates contain a fair amount of good news. With the Government planning to spend an extra €2.5 billion on public services and infrastructural investment, there will be more money for health, education and social welfare. The most savage of last year's petty-minded cutbacks on social welfare allowances will be reversed. Nearly a quarter of a million more people will be able to visit their GPs without having to visit their ATMs first. Some progress will be made towards tackling the appallingly inhumane conditions in Accident & Emergency departments. Another 760 people with intellectual disabilities will get a place on some kind of State-funded programme.
How wonderful are these improvements on what the EIU clearly imagines to be perfection, though? Improvements in services have to be judged against the things that the EIU neglected to mention, the dire needs that have been accumulated over decades of neglect. If things were as great as they're supposed to be, Cowen's new money would be a shocking waste. What's the point of trying to be better than the best place in the world? In reality, the extra spending will mean a modest improvement on what is, in many respects, an awful situation.
For example, one of the most tangible plans contained in the Estimates and the accompanying statement from the Minister for Health and Children, Mary Harney, is the allocation of an extra €205 million for services for people with disabilities. Harney put flesh on these bones for people with intellectual disabilities and their carers - a group of citizens who have been treated appallingly over the years. In the shameful context of Ireland's continuing incarceration of people with intellectual disabilities in mental hospitals, there is some hope in the figures she has produced: 270 new residential places; 90 new respite places; and 400 new day places.
These figures look good until they are compared with those in the Intellectual Disability Database maintained by Harney's own department. In its latest report published less than six months ago, it quantified the demand for intellectual disability services as follows: 2,284 people are either without any services or without a major element of the service they need; 1,776 full-time residential places are required by 2008; 546 day placements and 1,637 residential support services, such as respite services, are required; and 11,135 of those who already have services will have to have those services enhanced or changed to adequately meet their needs. A further 1,737 people are identified as not having any current requirement for services, but in many cases this may simply be a result of them having no contact with State institutions.
A more sober analysis therefore produces more sobering results. In reality, the much-trumpeted new money will meet a small fraction of the needs. The 400 new day places are a terrific step forward and, if the same commitment is made next year, the State will be well on the way to an adequate service. But the 270 new residential places constitute less than one-seventh of the minimum requirement over the next three years. The 90 respite places amount to about 4 per cent of what's needed.
So even in this area, which was highlighted by Cowen as one of the major examples of the new, caring approach, the step towards the basic standards that any civilised society would expect for its most vulnerable citizens is very small.
A similar picture emerges from a glance behind the impressive figure of 230,000 more people becoming entitled to a medical card. This looks less wonderful, however, when the figure is placed in context. By not increasing the income eligibility levels in line with inflation, Fianna Fáil and the PDs have ruthlessly reduced the number of people with a medical card. In 1997, when the present coalition came to office, 1.25 million people were covered by a medical card. By September 2004, this had fallen to 1.15 million. Because of the extension of the medical card to everyone over 70, however, far more than the 100,000 people this raw figure suggests have lost their medical cards since 1997. Over the longer term, the proportion of people with a medical card has declined from around 40 per cent in the 1970s to 28.5 per cent now.
The effects of these silent cutbacks have been drastic. The State's advice agency, Comhairle, recently estimated the cost to an average low-income family of losing their medical card at about €3,000 a year. The measures announced on Thursday will not fully reverse the cuts of the last seven years. Currently, a couple, each of whom is receiving Disability Allowance, gets €269.60 a week. The medical card income limit for a married couple is €206.50, so we have the cruel and absurd situation where this disabled couple doesn't qualify.
Under Harney's new guidelines, the income limit for a full medical card is to be increased by 7.5 per cent, so this couple still won't get their cards. What they may just about get (depending on whether Cowen's Budget increases their Disability Allowance by a substantial amount) is a new second-class card which will entitle them to GP care only. Some of this benefit may be offset, however, by the increase of €7 in the amount people must spend on drugs every month before being entitled to a refund. The big picture, therefore, is not a great advance towards a decent level of care, but a small step towards getting poorer people back to where they were in 1997.
It's also useful to put some of the figures in the Estimates beside others. For most of us, six- and seven-figure sums are like dinosaurs - we know they're big but since we've never seen them we don't quite know how big. We need those diagrams that put a picture of a Tyrannosaurus Rex beside one of a human. Doing something similar with the Estimates makes the sense of priorities clearer and the notion of a new left-wing approach by the Government a lot more dubious.
What, in terms of Government spending, will come within the €2 million to €5 million range? Well, there's the grant for the upkeep of zoos at €2.5 million, the budget for paper clips, photocopiers and other office supplies at the Department of Finance at €3.3 million, or the entire budget for the Combat Poverty Agency at €4.1 million. The allocation for the Blind Pension at €15.4 million is roughly the same as that for postal and telephone charges at the Department of Social and Family Affairs that pays it out. The budget for the National Educational and Psychological Service, which has the job of saving children from losing their chances in life because their problems go unrecognised and untreated, is €600,000 less than the amount the Revenue Commissioners intend to spend on consultants.
You could take all the money to be spent on the Family Income Supplement, which is the main State support for working families living in poverty, and add all the money to be spent on the alleviation of disadvantage in third-level education and you'd still have change from the €69 million that's been allocated towards the Horse and Greyhound Racing Fund, which is spent mostly on upgrading racecourses and providing prize-money for super-rich racehorse owners. That pot of money for the horses and dogs is more than twice as big as the sum that's allocated to adult education initiatives at a time when nearly a quarter of the adult population is functionally illiterate. It's €5 million more than goes to the National Treatment Purchase Fund, which has been claimed as the Government's flagship project for cutting hospital waiting lists. It's €9 million more than the big headline-generating concession in the Estimates: the €60 million extra for medical cards.
The Department of Foreign Affairs has been given €35 million to spend on supplies, furniture and equipment for its offices. That's more than the Family Support Agency and the Education Welfare Board (EWB), which is the Government's big initiative to tackle, amongst other things, the disastrous level of absenteeism from Irish schools, put together. The EWB's €7.8 million allocation, indeed, would just about cover the cost of office supplies at the Departments of the Taoiseach, Finance and Justice.
One other figure that emerged on Thursday, around the same time that the Estimates were being published, helps to put things in perspective. Cowen estimated the day-to-day cost of running the State next year at €37.8 billion. While he was polishing his speech, Frank Daly, chairman of the Revenue Commissioners, and Michael Noonan, who heads the Public Accounts Committee, were pointing to the fact that between 1988 and 2001, €33 billion went into single premium insurance schemes, at least some of which seem to have been run as tax scams. And this is the other story the Estimates don't tell. They reveal how much the Government plans to spend. They don't tell us whose money it is. Any genuine shift in Government thinking has to engage with income as well as expenditure. The revelation of yet another huge area of organised tax evasion was a reminder that there's more to balancing the books than keeping an eye on spending.
It is, in a sense, a mark of gross stupidity that any rich Irish person bothers to evade tax illegally when there are so many ways to avoid it in perfect compliance with the law. Recently, the Revenue Commissioners revealed its estimate that tax breaks available to high earners are costing the Exchequer €8.3 billion each year. The figures relate to 28 generous relief schemes provided by the Government, including investments in hotels and holiday homes. However, the Revenue has not provided estimates of the cost of a further 33 tax breaks, including the exemption for stallion fees, donations to third-level institutions and income from foreign trusts. Astonishingly, these 33 other schemes are entirely uncosted.
Even the €8.3 billion that we know about, however, puts an interesting gloss on all the excitement about the Government's caring, sharing Estimates package. The extra spending announced yesterday, together with another €1 billion or so that is expected to be announced in the Budget, amounts to around €3.5 billion. This so-called giveaway Budget will dole out far less than half of what the Government gives every year to wealthy individuals in the form of tax breaks. These tax breaks are, from the point of view of the Exchequer, the same as spending, yet they are left out of the fiscal arithmetic and most of the media commentary.
If Cowen had announced on Thursday that he was planning to spend an extra €8.3 billion on the alleviation of poverty, it would have marked a revolutionary moment. But the spending of that amount on those who are already wealthy makes no impression whatsoever.
For those who take a broader view of the quality of life than the EIU does, Ireland has a very long way to go towards being a decent society, and a Government that gives away far more to the rich than to the poor isn't likely to get there any time soon.