The Government and Minister for Finance Brian Cowen deserve to be congratulated for meeting their National Anti-Poverty Strategy targets for the period 2002-2007. It may not be an earth-shattering achievement, given continuing social inequalities and high levels of child poverty in this State, but it is a step in the right direction.
Welfare increases and child allowances in the 2007 Budget brought a significant fall in the percentage of the population affected by income poverty.
The fact that the good news was provided by the Combat Poverty Agency will be particularly gratifying to those Ministers who, over the years, had come to regard its activities on behalf of the most vulnerable sections of society as an annual criticism.
Its analysis of Government budgetary policy was not all positive. The decision to cut the top rate of income tax to 41 per cent was criticised because it gave almost three-quarters of the benefit to the top 10 per cent of households. Government spending on maturing SSIAs was seen to benefit the better off and absorb three times the amount devoted to income tax/welfare improvements in the Budget. Combat Poverty also called for a rebalancing of indirect taxes, which bear most heavily on those with low incomes. Indirect taxes now account for half of the Government's entire revenue and bring in some 50 per cent more than income tax.
There may be disagreement about regressive taxation measures and the allocation of resources. But earlier representations made by Combat Poverty and the St Vincent de Paul Society on behalf of single and unemployed parents, children at risk and older disadvantaged and homeless people seemed to have influenced Minister for Social and Family Affairs Séamus Brennan. These "most at risk" groups gained most in the December Budget. Child dependant allowances were increased for the first time in 14 years. And, at the lowest income levels, relative poverty fell by 11 per cent.
Concern about poverty and social inequality is a relatively new phenomenon within this Government. But then, so is the revenue generated by the Celtic Tiger. Combat Poverty contrasts the Government's tax-cutting record from 1998 to 2002, which drove job creation and helped the better off, with the 2003-2007 period when the incidence of income poverty was reduced by 37 per cent. During the latter years, welfare payments rose by more than half, well in excess of price inflation and wage growth.
This report provides an analysis of Government welfare and income tax spending in recent budgets. It is, properly, supportive. It does not, however, look at the continuing inadequacies of those services involving childcare, training, housing, health and education that can overwhelm families living under the threat of poverty. If these people and their children are to be provided with an improved quality of life and a bright future, a considerable investment will have to be made in basic services.