9 December 1999 Edition
O Caoláin slams McCreevy's Budget for Inequality
BY MÍCHEÁL Mac DONNCHA
Speaking in the Dáil on Budget 2000 on 2 December, Sinn Féin TD Caoimhghín Ó Caoláin described it as the ``most divisive in years''. He lashed the tax discrimination against parents who choose to care for children in the home. Deputy Ó Caoláin said:
``For the third time in the life of this government, the Minister for Finance has failed to use the unprecedented resources at his disposal to fight inequality and poverty in Irish society. Instead this Budget deepens the divisions between rich and poor in our country at a time when, with the peace process having made such progress, we should be moving towards the creation of real equality and real social justice on this island.
``This is the most divisive Budget in years. The wealthy have been rewarded again; the higher paid have benefitted disproportionately from the tax changes; the lower paid and those dependent on social welfare have been left with the crumbs from the table. They might be bigger crumbs but they are still crumbs. The disadvantaged are not welcome at Minister McCreevy's millennium banquet for the better off. To use a term close to Minister McCreevy's heart - they are not at the races.
``The centrepiece of Minister McCreevy's budget is his claim to be the most radical tax reformer of all time. Yes, there are some welcome moves to reform the system but the thrust of the Minister's tax changes are to give the bulk of the benefits to the better off. As we said in our submission to Minister McCreevy, Sinn Féin believes that the vast majority of citizens are glad to see their taxes used for progressive public spending, improving services for all and assisting the least well off in our society. We refused to join the simplistic chorus which calls for giveaway tax cuts and which thereby spurns the opportunity of the current economic climate to make real social progress. What we need is taxation justice not simple taxation reduction.
``What has Minister McCreevy given us? Instead of the scales of justice we have the scales on the eyes of a Minister and a government who wilfully ignore low-pay poverty and unashamedly reward the wealthy, who least need relief in the tax system. The simple statistic tells the tale. A single PAYE worker on £14,000 per annum will be better off by £5 a week while a single worker on £50,000 will be better off by £32 per week.
``There is outrage throughout this country today at the blatant discrimination in this Budget against parents, primarily women but increasingly men, who choose to care for their children in the home. Like other deputies, I have received representations this morning from outraged citizens. A couple in Dublin sent me a copy of their open letter to the Minister in which they state: `You are now telling me that my wife is a non-productive person in our society until she goes out to work and that you intend to penalize us for minding our children at home.'
``These disastrous measures will undoubtedly deepen the childcare crisis. In our Budget submission we in Sinn Féin said that we need to put children back at the centre of the childcare debate. The priority of all must be the provision of the best care at all times for all of our children. That includes care by parents in the home, care by other family members, paid care by childcare workers in the home, early childhood education, crêches and other facilities provided by the community or voluntary sector or by private concerns.
``The first choice of most couples remains to give their children the best care possible and that is full-time care by a parent or parents in the home. This Budget is an insult to them and I believe that on this issue alone Fianna Fáil and the Progressive Democrats will pay a heavy political price and rightly so. They should pay that price now.''
What women really need from McCreevy
As we go to print, it appears that Charlie McCreevy is preparing to make concessions on his Budget taxation proposals with regard to double-income married couples, following a wave of protests. Here, Anne Maguire gives her personal analysis of the issue that has raised so many hackles and spoiled what was supposed to be a feel-good budget for Fianna Fáil and the PDs.
BY ANNE MAGUIRE
There has been a storm of protest unleashed by Charlie McCreevy's Budget proposal to award extra tax relief to double-income married couples while not affording the same benefits to married families where only one spouse is in the workforce.
In the midst of the public outcry, groups and individuals are lining up to condemn the move, creating unlikely bedfellows. Norah Gilligan, Chairwoman of the Women in the Home group, Dr Desmond Connell, the Catholic Archbishop of Dublin, and Rosemary `Dana' Scallon, MEP, find themselves allied with the Labour Party, the Irish Family Planning Association and journalist Emily O'Reilly.
The budget has begun a shift of the whole basis of taxation from families to individuals not in attempt to remove the discriminatory aspects of our tax and social welfare system, not to promote real choices for parents but to facilitate the growth of the free market.
What exactly is the change to the tax code? Husbands' and wives' eligibility for the standard rate will no longer be calculated on a joint basis where spouses have chosen to share tax free allowances: instead each will be treated separately - a move towards what is known as the individualisation of the tax bands over the next three years.
And what does it mean in real terms? Paid work will be considerably more attractive than working in the home through the implementation of a tax wedge in favour of people in paid taxable employment, in part recognising that there are costs as well as benefits to participation in the labour market.
Rosemary Scallon, MEP, has gone on record to say that there will be little to celebrate this Christmas for married, single-income families. Why? While it does represent a big boost for all dual-income married couples, one-income married families will not be worse off than before the change.
From media coverage it seems that a lot of public representatives agree with Dana on this one. Fine Gael has pledged to force a reversal of the tax proposals. The Labour Party has called on Independent TDs to examine their consciences and not to support what Ruairi Quinn has termed a right-wing anti-family divisive measure. While we can all sympathize with the opposition's unenviable task of rallying against £1.4 billion-worth of budget giveaways, I would question their decision not to critique the truly questionable slant of the budget towards business and high earners and instead content themselves with whipping up hysteria.
If this change is antifamily, inequitable and socially divisive, does that mean that the current tax system is pro-family and socially inclusive? Feminists, including the leadership of the National Women's Council, have never been that keen on the workings of the tax and social welfare systems. The supposedly family friendly polices to date are based on the mainstream orthodox definition of economic activity, which no one can view as women friendly or gender neutral.
So what's at the heart of the problem? Firstly, let's separate out the issues.
There is no doubt that the Budget has done nothing to recognise women's unpaid work. There was no spirit of the Partnership 2000 commitment to an evaluation of unpaid work and its contribution to the country's Gross National Product contained in any aspect of the Budget. Neither did it give any indication of how the government plans to honour Fianna Fáil's 1997 Manifesto promise to introduce a £2,000 tax allowance for stay-at-home parents.
There is no doubt that it has done next to nothing to help parents access affordable childcare. Whether the childcare in question is needed by parents five days a week to participate in the paid labour market or for occasional use to give stay at home mothers a break from full time care, this is not a budget focusing on the issue of accessible affordable quality childcare.
There is no doubt that little or nothing will change to help low-income families provide their offspring with the proven benefits that pre-schooling activities bring children's early educational and personal development, allowing them to participate fully and compete equally in economic and societal life.
It is without question a budget aimed at higher earners, not about social equity. There is no question at all that the measure is about the need of employers for older married women to bring their skills to bear in the ever-tightening labour market. It is not about providing women with real choices. Unquestionably, the change is about increasing tax revenues over the long term, making further tax cuts sustainable without calling on businesses to dig into their profits to sustain economic growth through facilitating working parents.
It is without question a budget aimed at higher earners, not about social equity. There is no question at all that the tax relief measure is about the need of employers for older married women to bring their skills to bear in the ever-tightening labour market. It is not about providing women with real choices
On these points we can all agree. But is it discriminating against one-income families? Is it an attack on women who wish to exercise their choice to stay at home and rear their own children? Does a change to help working couples really undermine the recognition of women's work in the home as carers, on the farm and other family business and as the mainstay of volunteers in the wider community?
There has been a lot of talk about the unconstitutional nature of the change and how it forces women from their traditional role within Irish society. Article 41.2.2 of the Constitution recognises the value of woman's ``life within the home'' and goes on to say that ``The State shall, therefore, endeavour to ensure that mothers shall not be obliged by economic necessity to engage in labour to the neglect of their duties in the home''.
As I listened to the entire outcry and outrage a couple of nagging points came to mind. With the narrow interpretation of women's contribution to Irish society and no mention of fathers in the home Article 41.2.2 has never struck me as pro-women or indeed pro family. The argument that it is an attack on women working full time in the home ignores the fact that women in the workforce also have family responsibilities and so also lose out when unpaid work continues not to be recognised or rewarded. It also ignores the fact that a significant number of women have always headed households, have always had to work to support their families as well as choosing to work outside the home. It also ignores the fact that the State has a role to play in the nurturing of our children and care of dependants.
The second point all but lost in the recent furore is that the option of transferring tax-free allowances has only ever applied to married couples not families in all their forms. In addition, it only brings savings to households where either one spouse is not in paid employment at all or where one earns considerably less. Dual income couples, with or without children, on similar earnings find no advantage.
Amid all the wailing and gnashing teeth is a presumption that the present system was somehow fair and equitable and the proposed change deeply unjust. This is simply not the case. ERSI economist Tim Callan has given the example of two couples each earning £40,000, one couple needing two earners to achieve this while the other couple can do so on one income. He says, and I quote: ``At present, each has a similar tax bill, as if each had the same total resources and ability to pay. But is the system fair? Which family is better off, the one which earns £40,000 and has one parent available to care for the children and manage the home, or the couple which earns the same cash amount but does not have the benefits arising from having one partner in the home.'' This simple mathematical equation shows how the existing system is biased in favour of the single income family where one partner stays at home. Though the benefits and therefore bias has impacted more on high earning households. In that context its telling that the Combat Poverty Agency has come out in support pointing out that the change towards individualisation of the tax code only affected well-off tax-paying households.
And what about the effects on married women themselves? It is well recognised that the current practice of transferring tax-free allowances between married couples has long militated against women's re-entry to education, training and participation in the labour market. Women's groups, trade unions, and community networks have campaigned about the use of the live register as a gateway to education opportunities, because of its inherent discrimination against women. Married women who have been out of the labour market truly feel that they do not have a tax free allowance at all as once it has been transferred to their husbands it ceases to bring them direct benefits in terms of individual PRSI derived benefits. To compound this, the disposable family income becomes dependant on the husband's full use of the double tax free allowance and attempts to re-allocate it when women wish to return to paid work can prove personally difficult as well as financially unrewarding. Married women who choose to combine employment and family responsibilities therefore face very real disincentives, as pointed out by SIPTU's Equality Officer, Ms Callender, when welcoming the move towards the individualisation of the tax bands in principal rather than how it is being implemented.
So is this change all about the need to balance home and working life? A recognition that most couples need two incomes to make ends meet? That choosing to stay at home and nurture children is either a luxury confined to high single income families or belies the lack of option for low income families as they could not earn enough to pay for childcare? As recognition that there is a financial cost as well as gain to paid work, abet crudely presented? Is it hell.
The failure of the Minister's proposal to make a distinction between two income couples with or without children clearly illustrates that concern for the struggles of working parents has not prompted this change. The need for stay at home parents - women - to take up relatively meaningless, low paid part time jobs is at the heart of the proposal. It recognises that a growing number of women who could afford to do so voted with their feet and left the paid work force refusing to struggle in what Maev-Ann Wren describes as a straitjacket of working hours designed for men with wives at home.
More tellingly, that a cross section of Chambers of Commerce spokespeople and IBEC welcome the move to an individualization of tax bands illustrates that the measure is about employer gains and employer gains only. It allows employers to benefit from the increased number of women in the work force without placing any obligation on employers to promote family friendly work practices. It places the full burden of securing quality care for children of working parents on those parents refusing to recognise that the care of our children is everyone's responsibility for the benefit of children not employers.
But in terms of discrimination and paid work this is not forcing women out of the home - their financial position has not worsened. Rather the financial position of women in married partnerships in paid employment has got a boost - not the massive boost it may appear when the costs of participation in the labour market for women with caring responsibilities are taken into account. For couples who can already afford to have one parent stay at home, the extra tax relief will not act as an incentive and for couples who can't afford to both participate in the workforce the realities of childcare costs and availability will quickly diminish any benefits.
The bigger issue is the Minister's fudging of the right to have a gender-neutral tax and social welfare system. Our tax and social welfare system puts women working in the home in a position of economic dependency, rendering them invisible in their own right and denying them access to the full range of individual PRSI benefits. Non individualised tax and social welfare systems are based on the presumption that household income is automatically shared and controlled equally. There is no recognition that fair and equitable allocation of resources does not exist within all households. While small changes have been introduced to rectify this, huge areas of discrimination remain, most notably in terms of pensions. A bigger issue is the lack of right-based access to social benefits for all women. The National Anti Poverty Strategy specifically refers to the need to individualise social welfare payments to end women's dependancy status within social welfare, for example.
So is this a first step? Maybe. It is a way of tweaking with inequality without ever having to fully acknowledge it or compensate the women affected to date. In the absence of any real change on these fronts, the fact remains that women are better off being economically independent and that economic independence comes not from our contribution to creation of wealth through caring roles but from direct participation in the labour market. The move to individualisation of the tax codes allows women to benefit more fully but does not deal with the central issue of why this is. The Budget has begun a shift of the whole basis of taxation from families to individuals not in attempt to remove the discriminatory aspects of our tax and social welfare system, not to promote real choices for parents but to facilitate the growth of the free market.
But then social norms and traditions have always stemmed from fiscal priorities. In the 1940s, throughout the western world, women worked full time in munitions factories for the benefit of their nations. When the men came home they needed the jobs and women were told that the home needed their skills most, for the benefit of the nation of course. So our precious tradition of the full time stay at home mum was borne of economic necessity in the 1950s, not from a recognition of the contribution of women's unpaid work. Women who could, have always paid other women to clean their houses, care for their children and nurse their parents without society being unduly concerned for the well-being of the wet nurse's own offspring.
As Inez McCormack said in the Irish Times on Wednesday, ``those of us who fought for individualisation of income on the basis of equality are angry this has been distorted into removing riights from women who want or need to stay at home''.
Charlie McCreevy is clearly saying that equality will come only when it suits the market economy and only on free market terms. This is where the anger should be directed and changes sought. It is without question a budget aimed at higher earners, not about social equity. There is no question at all that the tax relief measure is about the need of employers for older married women to bring their skills to bear in the ever-tightening labour market. It is not about providing women with real choices
Unions show their teeth but where's the bite?
BY ROBBIE MacGABHANN
Cassells and Geraghty have a lot of work to do to convince the general public that they can deliver
What a difference a weekend can make. Last week, in the aftermath of the budget, spokespersons from the Irish Trade Union movement leadership were expressing happiness at the general tenor of the tax cuts on the budget. Yes they had some problems with the failures on childcare etc, but these were muted.
By Sunday, all was changed utterly, and by Monday, SIPTU had withdrawn from the negotiations on a successor to the Partnership 2000 employer-union wage negotiations.
On Wednesday, 1 December, the Irish Congress of Trade Unions (ICTU) welcomed the £942 million in tax cuts. The ICTU concerns were articulated by a spokesperson who said that the tax reforms ``must not be seen as a substitute for decent pay increases''. The social welfare increases were no more than the ``beginning of a move towards a fairer society''.
SIPTU President Des Geraghty also welcomed the scale of the tax package on 1 December. He did, however, point out that many of the measures would increase inequality.
This week, ICTU general secretary Peter Cassells has taken a much harder line. Suddenly, the failure of the budget ``to introduce any substantial improvements for low paid workers is unacceptable''.
Des Geraghty, speaking on 6 December, had also suddenly found that his position had hardened. ``We are not going back into those talks until we know the government position on low pay.''
On the issue of the unfair taxation of one-worker families, Charlie McCreevy U-turned slightly yesterday, 8 December. However, today there remains the glaring problem of low paid workers still in the tax net, a complete failure to produce adequate social welfare increases and a derisory increase in child benefit.
The trade union movement miscalculated badly last week. Their strategy was that the budget was just round one in dealing with the issues of low pay and childcare and systematic social exclusion. This coming round of partnership negotiations would help resolve these outstanding issues.
However this is the fifth such round of negotiations over the past 12 years, a period where the low paid, the child minders and the unemployed were overlooked. Cassells and Geraghty have a lot of work to do to convince the general public that they can deliver on these issues this time around. It will take a lot more than good soundbites.