The Covid-19 crisis has highlighted a number of aspects of the welfare state and the importance of properly provided and funded public services in countries across the world. Among the many lessons in this country, the crisis has highlighted the importance of the social safety net that is our social welfare system.
Budget 2022 needs to prepare Irish society for the inevitable social and public policy challenges that are likely to appear as the pandemic subsides. Among the most visible of these will be challenges associated with work, unemployment and job creation.
Social Justice Ireland is proposing a €10 increase in core social welfare payments in Budget 2022. This would set Government on the correct path to benchmark social welfare rates to 27.5 per cent average weekly earnings over a two-year period, which was the standard set in 2007. Budget 2021 was the second budget in a row which failed to deliver an increase to the minimum social welfare payment. A repetition of this failure in Budget 2022 would leave those who are most vulnerable in a very difficult position and see them fall further behind.
Social Justice Ireland’s income model tracks the distributive impact of annual budgets on households across Irish society. As different priorities can be articulated for each Budget, it is useful to bring together the cumulative effect of policy changes across a number of years.
Despite significant progress over the past few months, Ireland remains in a period of enormous uncertainty. Optimistic assumptions point towards a rebound in economic activity and employment from late 2021 or early 2022. Conversely, pessimistic assumptions fear ongoing public health related disruptions and a slow emergence from the Covid-19 crisis. Most likely, the reality lies somewhere in between - but there are limited clues as to where.
Budget Choices 2022 contains detailed, fully-costed Budgetary packages across more than a dozen policy areas including health, housing, education, welfare, sustainability and more; it also contains a range of costed, revenue-raising proposals.
Despite the immediate uncertainty, Budget 2022 must embrace the need for new approaches to how we as a society prioritise choices. People, well-being, public services and a widespread and fair recovery must come first.
How we plan our finances, and what we choose to prioritise, post-Covid-19, will have profound implications for the future of our economy and society. To this end Social Justice Ireland proposed to the Select Committee on Budgetary Oversight that the priorities for Budget 2022 should be adequate social welfare rates and poverty reduction, just taxation, housing for all and tackling unemployment.
Over the past few years Social Justice Ireland has developed its ability to track the distributive impact of annual Budgets on households across Irish society. Our analysis tracks changes from year to year (pre and post each Budget) and across a number of recent years. As different policy priorities can be articulated for each Budget, it is useful to bring together the cumulative effect of policy changes on various household types.
The need for a wider tax base is a lesson painfully learnt by Ireland during the last economic crisis. A disastrous combination of a naïve housing policy, a failed regulatory system, and foolish fiscal policy and economic planning caused a collapse in exchequer revenues. It is only through a strategic and determined effort to reform Ireland’s taxation system that these mistakes can avoided in the future.
