European Commission Country Report gives food for thought

The European Commission report:

  • Highlights growth in Poverty: 30% of children at risk of poverty
  • Points to gaps in services infrastructure
  • Criticises decisions to cut taxes and forgo new income (Irish tax take is 29.7%, as against EU average of 39.1%)

By Paul Ginnell, Policy Officer, EAPN Ireland

 country report

As polls closed on election day on February 29th, the European Commission published its annual Country Report for Ireland.  They had not wanted to publish it before 10:00pm in case it was seen to be influencing voters. As it turns out there is quite a lot in the report that would be of interest for those voting on the day and I would encourage you to have a look.

The report includes a detailed analysis on a broad range of areas with the emphasis on macroeconomic concerns but also addressing a range of areas relevant in addressing poverty and social exclusion including housing, health and one section covering the labour market, education, social policies and inclusive growth which covers childcare.

 

Gaps in public service infrastructure

One of the most important messages from the Report is that Ireland has large gaps in its public services infrastructure, which also suffered major cuts during the crisis. This has resulted in increasing issues for the quality and adequacy of the services which now need immediate investment. The specific areas which are highlighted are in transport, housing and water infrastructure while education and health are also highlighted but as less severely affected by cuts.

 

Low overall tax take

The next section of the report is on taxation, which is the key source of the resources necessary to invest in in this infrastructure. The report highlights that Ireland’s overall tax take is low by EU standards with the Irish Government collecting taxation equivalent to 29.7% of GDP in 2015, whereas the EU average is 39.1%. The Report looks at various areas of taxation, which makes interesting reading. It is critical of the Government’s recent decisions to cut taxes or forego the opportunity to bring in revenue in some areas as both regressive and as not geared towards broadening the tax base.

While the issue of broadening the tax base is important in addressing the gap in public services the Commission should really not be surprised that investment in Ireland’s public service infrastructure, already underdeveloped before the crisis, has suffered so much during the crisis. These cuts were a direct response to the austerity policies promoted by the Commission itself as part of the troika and implemented by the last two Governments in Ireland.  Investment in social infrastructure is also restricted by the expenditure rules Ireland is tied to under the EU’s Stability and Growth Pact.

 

Education needs investment

In the section of the report dealing with education the Commission specifically highlights that the decrease in expenditure in the area of education has had a negative impact. It specifically points out that the increase in the student-teacher ratio in many schools, a reduction in the allocation of language support and the withdrawal of both the Visiting Teacher Service and Resource Teachers for Travellers could in turn have a negative impact on the quality of educational outcomes in the future. These specific cuts were used by EAPN Ireland to highlight to the troika and the Government at the time, that short term measures to make savings and reduce budget deficits would result in longer term social and economic costs. These impacts are now apparent.

 

Increase in Poverty

The report highlights that relative poverty and income inequality have increased with three in ten children now at risk of poverty and social exclusion. These too are as a result of policy decisions in a range of areas. In addressing the issue of poverty and inequality the Country Report focuses mainly on the Government’s measures to address the low work intensity of households. While supporting people to access quality work with a living wage is very important the Commission, and the Government, need to take much wider analysis of the causes and solutions to addressing poverty and inequality. Access to quality social services, addressed in other parts of the report, also have a key part to play. While the report does highlight that social transfers have been effective in greatly reducing poverty levels it does not address the need for an adequate income for those depending on social welfare supprts. Current social welfare payments for those of working age are €20 below the poverty line and are far off the levels needed to provide people with a minimum standard of living as calculated by the Vincentian Partnership for Social Justice.

 

In picking up on issues missed in the past by the Commission the Report does highlight the need to invest in quality, as well as affordable childcare. In the area of health it goes past solely focusing on cost effectiveness to highlighting the inequality that exists in the Irish two tier health system, but does not go as far as addressing the poorer health outcomes for those from those with lower incomes and from more disadvantaged groups in society.

briefing

Where this comes from

These Country Reports are published as part of the EUs European Semester process and the Report for Ireland is meant to inform the Irish National Reform Programme, which they will send to the Commission in April, and the Country Specific Recommendations Ireland will receive from the EU in May.  As the name suggests the Recommendations give very specific guidance to the Government on policy changes they want to see put in place.

Hopefully when the Commission does issue its Recommendations in May it will include one asking the Government to develop a new all of Government anti-poverty strategy which addressing the different dimensions of poverty, including ensuring the people have an adequate income, whether they are in or out of work.

The European Commission’s Country Report is available at: http://ec.europa.eu/europe2020/pdf/csr2016/cr2016_ireland_en.pdf

 

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