Budget's poverty of vision

If not now, when? If, when a government has more than €50 billion to spend on running the State and €4

If not now, when? If, when a government has more than €50 billion to spend on running the State and €4.4 billion to distribute as it chooses, it can make no radical impact on any of the gross injustices that disfigure our society, will it ever do so?

Brian Cowen's Budget last week was mildly progressive.

Giving a substantial increase in basic social welfare payments and closing off some of the more scandalous tax loopholes (though not, be it noted, until July 2008), it marked a return to the relative decency of old-fashioned Fianna Fáil populism. But to suggest, as Brian Cowen did, that it embodies a commitment to "reaching full equality" in Irish society is absurd.

What it really represents is a commitment to palliative care: the pain of structural inequalities will be alleviated but the condition will not be cured.

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It is, for example, rather nice that wealthy people who have hitherto managed, quite lawfully, to pay no tax at all, will have to cough up something. But the radicalism of the measures to create a fair tax system can be gauged from one of the Revenue's own examples. It takes the case of a single man earning €400,000 a year who currently manages his finances so as to pay no tax.

In 2007, under the Budget changes, he will pay €57,000 tax. We may weep for the poor man's sacrifice, but he will still pay a vastly lower portion of his income than many PAYE workers on middling wages. Equally, it is nice that carers will get a much-trumpeted new package of supports, costing €27 million next year. But that's just €2 million more than the State will forego by cutting betting tax.

The Budget itself, meanwhile, will increase income inequalities, especially for working people. A working couple with two children earning €100,000 a year will gain by 2.3 per cent. A similar couple earning €30,000 will gain by 1 per cent. The big picture suggests that Budget 2006 is no more progressive, in terms of the degree to which it redistributes income from the better-off to the less well-off, than Budget 2005 or Budget 2004.

According to the Department of Finance: "The overall distributional effect is similar to that achieved in the last three budgets." Assuming a broadly similar budget next year, the recent mildly progressive budgets will probably end up cancelling out the sharply regressive effect of the earlier McCreevy budgets. So, after a decade in power, in circumstances of unprecedented opportunity, the Coalition will have redistributed little, if any, income from the rich to the poor.

None of this is simply about the willingness to spend money. Two issues that could make a huge difference to the lives of poorer people are pre-school education and social housing.

A government with real drive would set big but achievable goals and make a real, long-term difference. Instead, in the something-for-everyone approach that marks the Budget, we get expensive gestures towards short-term crisis management.

The Government's own think tank, the National Economic and Social Council, has described the current housing crisis as "a major national challenge which bears comparison with other great challenges that Ireland has faced and met in the past half century". Over the period since the coalition came to power in 1997, Irish house prices have almost doubled - by far the highest rate of increase in the developed world. This boom for developers has gone hand-in-hand with a steady long-term decline of social housing provision. In 1975, 33 per cent of homes in Ireland were provided outside the commercial marketplace, by local authorities and not-for-profit bodies. Today the figure is just 7 per cent. The result is, according to P J Drudy and Michael Punch in their book, Out of Reach, to be published this week, a quarter of a million people in housing need.

What do we get in the Budget? Funding for local authority and voluntary housing will increase by just €49 million in 2006, a figure that, in the context of housing inflation and soaring land costs, probably represents a real decrease. The State, meanwhile, will continue to deliver €370 million a year in subsidies to private landlords through the rent allowance and emergency accommodation systems.

Spending money to prop up a bad system is fine, but spending money to end it isn't.

The same goes for childcare. The State is now committed to spending at least €789 million between now and 2010 on childcare measures. The money will be spread around in such a way as to give most people something without having a major impact on anything.

Yet the introduction of a national pre-school education system, which would be, according to the National Economic and Social Forum, "a landmark in Irish social and educational history", would probably cost no more.

The forum estimated the cost between 2005 and 2009 at €680 million. The benefits would be enormous, both in terms of social justice and of lower future costs to the State through, for example, higher educational levels and reduced crime. But big, exciting achievements like this demand vision from the top. Instead, all we've got is money.