Last Monday Progressive Democrats TD Liz O'Donnell, in an article on this page, challenged my reference in this column to "the greatly increased inequalities that Fianna Fáil [spurred on, I should of course have added, by the PDs] have allowed to distort our society, making it one of the most unequal in Europe". She claims that this assertion was made "without any supporting evidence".
She should know that I do not make statistical statements without supporting evidence. EU statistics setting out the ratio of incomes of the top one-fifth and bottom one-fifth of the population - a standard measure of inequality - show that in the most recent years in respect of which these data are available, (2003-2004), amongst the 11 EU states with output and living standards similar to ours, only Italy and the UK had a greater level of inequality than Ireland. These figures show that in these terms our inequality rate is almost 30 per cent higher than that of the other prosperous EU countries.
Moreover, O'Donnell might recall that when she was minister of State in foreign affairs, her senior minister and her taoiseach, at the Laeken European Council of December 2001, joined with their EU colleagues in adopting indicators of social inclusion to be developed by the EU Social Protection Committee. The first of the primary indicators thus established under the authority of that European Council as a measurement of social inequality is, of course, the percentage of each country's population whose income falls below 60 per cent of its median income.
Given the amount of publicity that has since been given in our media to the outcome of this key measurement of inclusion - or its absence! - in Ireland, I find it very hard to believe that O'Donnell can be unaware of what these EU data have revealed. Let me remind her of some of the results of the study that was thus initiated by Bertie Ahern and Brian Cowen (then minister for foreign affairs) and their EU colleagues.
Ireland emerged from this EU social inclusion criterion as having been fourth-worst amongst the 15 EU member-states in 1997, when this Government was first elected. Nineteen per cent of our people then had incomes below 60 per cent of the 1997 Irish median income level.
And, in 2001, after four years of the government in which O'Donnell was a minister, Ireland had dropped even further back, to become the worst of all 15 EU states by the very criterion by which our government had accepted to be judged. Moreover, the proportion of our people living in relative poverty had by 2001 risen even higher during those four years - to 21 per cent.
And that is not all. For, when these figures are broken down between different age groups, it emerges that by 2001 no fewer than 44 per cent of all those in Ireland over 65 years of age had incomes below 60 per cent of the Irish median income. That proportion is one-third higher than anywhere else in the EU, and is 11 times greater than in the Netherlands. I simply cannot understand how O'Donnell can attempt to ignore such a situation.
(In fairness I have to add that since Cowen several years ago replaced PD-leaning Charlie McCreevy we have seen a belated effort to recover some ground. However, by 2002, after five years of an FF/PD government, we had fallen so far behind in the EU equity stakes that, if up-to-date data were now available, I very much doubt whether this would show us to have moved today much above the very bottom of the EU equity pile.)
Another feature of O'Donnell's article is her assertion of the existence of a "proven principle of low tax as an instrument of social and economic justice".
I have heard this assertion from other members of the PDs, and when explored one finds that it rests on the thesis that low taxes promote growth, which in turn creates employment and reduces unemployment which is, of course, one of the causes of poverty.
Now it is certainly true that our low rate of tax on corporate profits has contributed greatly to our high rate of economic growth and to our current very low level of unemployment. But there are two fallacies in the simplistic PD argument.
First of all, unemployment is only one of several causes of poverty. Inadequate social provision for those who cannot work as well as inadequate social housing, long delays in medical treatment, and large classes in schools in disadvantaged areas - all of these direct consequences of a low-tax strategy that yields inadequate public resources - are also involved. And all of these contribute to impoverishing far more people than even a high rate of unemployment could do.
Second, whilst low corporate taxation generates employment, this is not true to anything like the same extent of low personal taxes.
Thus, the Celtic Tiger took off in 1993 at a time when both the standard and the higher tax rates were seven percentage points higher than today - respectively at 48 per cent and 27 per cent. Today's low personal tax rates are a consequence of economic growth, generated in part by a low level of corporate taxation, rather than a cause of such growth.
Thus O'Donnell's assertion that low taxes are an instrument of social and economic justice is specious and misleading - not even a half-truth, because it represents not even a quarter of the truth.
As common sense tells us, and as the ESRI in a seminal paper two years ago has pointed out: "The success of countries like Denmark and the Netherlands in keeping relative poverty at a low level over a sustained period depends crucially upon a combination of a high employment rate and a comprehensive welfare system, ensuring that those without income from employment have an adequate income. Each of these factors is necessary. But neither, on its own, can be regarded as sufficient to keep relative poverty at a low level.
"Since the mid-1980s Ireland has made the transition. . . to a labour market with high employment and low unemployment.
"Over this period, however, relative poverty in Ireland has remained higher than the EU average. . . Achieving a low rate of relative income poverty. . . would require a more comprehensive safety net and higher rates of welfare payments."