If this Government is concerned about disadvantage, it can put €550 a year into the pockets of a couple living on a non-contributory old age pension, at no cost to itself.
It can provide the equivalent of a 2 per cent pay increase to the average industrial worker through encouraging competition in the retail trade and bringing down the price of food. But powerful vested interests are at work to frustrate such reforms and to withhold the benefits identified by the chairman of the Competition Authority, Dr John Fingleton. Within the coming months, the Government will have to decide between the interests of consumers and those of service-providers.
If Irish food prices were reduced from their present unacceptable levels to the EU average, the benefits for poorer people could be as much as 4.6 per cent of their incomes, according to Dr Fingleton. These startling figures were produced by the chairman of the Competition Authority in his efforts to encourage the Government to push ahead with reform. He dismissed as special pleading the arguments put forward against change by vested interests. Competition, he insisted, will benefit all elements of society in the long term.
Distributors and retailers in the food sector have lobbied heavily against the reforms recommended. They are opposed to change in the Groceries Order, which prevents below-cost selling by retailers. And they want the cap on the size of supermarkets and shopping centres to remain. Four years ago, those vested interests lobbied successfully against similar changes. We now live with the consequences. And they may win again. Last month, members of the Fianna Fáil parliamentary party opposed reform on the grounds that local shops and convenience stores would be wiped out by large, predatory retailers. This justification was one of the "spurious scare tactics" identified by Dr Fingleton.
Ireland is now the most expensive place to live in the euro zone and the Coalition bears a significant responsibility. Indirect taxes and other stealth charges at Budget time contributed to our current inflation rate. There has been plenty of official talk from the Taoiseach and the Tánaiste about the need for competition.
The Government committed itself to bringing down the level of inflation and encouraging competition as part of its contribution to the new national agreement "Sustaining Progress". Reducing the price of foodstuffs and bringing our living costs into line with our EU competitors can be achieved by simple, legislative action. But it will take courage to confront the vested interests involved. It is time for action.