Sinn Féin 2006 Pre-Budget Submission
The Budget for 2005, announced in December 2004 by Finance Minister Brian Cowen, amounted to an admission by the Fianna Fáil/Progressive Democrats government that their budgets since 1997 had failed the fairness test. Very belatedly some measures were taken to address inequality but we should be much further ahead. The level of inequality and consistent poverty today is testament to the fundamentally flawed approach of the FF/PD Coalition over their eight years in office.
The attempt by the Government now to be seen to address inequality is due in no small measure to the growing political strength of Sinn Féin.
In the wake of Sinn Féin electoral advances in the 2004 local government and EU Parliament elections, the Taoiseach discovered he was a socialist.
In 2005 Fianna Fáil has rediscovered that its sub-title is 'the Republican Party'. Even the PDs now want to be called republicans. And the State commemoration of the 1916 Rising is to be revived.
In the closing months of the current Dáil, as a General Election approaches in 2006 or early 2007, we believe this pattern will continue.
For Sinn Féin the real test is not rhetoric but the putting into effect of the Proclamation of the Irish Republic. It means "cherishing all the children of the nation equally" in practice.
But the FF/PD government has failed that test.
Published in 2005, the EU Survey on Income and Living Conditions shows that one in seven children in the 26 Counties - almost 150,000 - are living in consistent poverty. They suffer economic hardship on a weekly basis that excludes them from the quality of life and the opportunities for their future enjoyed by a majority of children.
A further significant minority of 242,000 children - some 23.9% of young people in the State - are at risk of poverty (otherwise known as relative income poverty). They live in households which have less than 60% of the State-wide median income.
The National Anti-Poverty Strategy set the year 2007 as the target date for consistent child poverty to be reduced to below 2% and eliminated altogether if possible. Clearly, with some 14% of children in consistent poverty, the target is far from being reached in 2007.
This confirms that despite the unprecedented prosperity in the Irish economy, it is one of the most inequitable in the developed world.
In the United Nations Human Development Index for 2005 this State comes third last in a league of 18 OECD countries in terms of poverty. Only the United States and Italy, among the developed countries, have worse levels of poverty and inequality. (It should be noted that the 'United Kingdom' is fourth from the bottom in this league and that included in its figures are the Six Counties where child poverty levels are worse than in the 26 Counties, adding to the total of avoidable hardship for children in Ireland).
This level of poverty is inexcusable given the affluent Irish economy of the 21st century. Record budget surpluses have been achieved year after year, yet the opportunity to move towards an Ireland of Equals has been squandered.
There is sufficient wealth in our society to ensure that, at the very least, no child should want for any of the basics of life and all should be able to look forward to a full and rewarding future. The lack of vision, the incompetence and the conservatism of successive governments in this State have robbed generations of children of their birthright.
Reversing all of this will mean a change in policy, a shift in emphasis towards social need and equality. As we have repeatedly pointed out, this will include moving away from the outdated model of annual budgeting and the 'Budget Day' ritual and towards multi-annual budgeting based on medium to long-term planning. It will require participatory democracy with the people and the Oireachtas having a real say in policy.
The priorities that Sinn Féin presents for Budget 2006 are designed to tackle immediate needs and the most extreme inequalities. A much more comprehensive approach will be required to move towards an Ireland of Equals. In this Budget we again urge prioritization of those most in need - the children of the nation.
Summary of Sinn Féin proposals
- Major early childhood care and education programme, including
Universal pre-school session of 3.5 hours per day, five days a week for all children in year before they go to school
Increase maternity leave to 26 weeks paid, 26 weeks unpaid
Increase revenue for Equal Opportunities Childcare Programme
Improved standards and inspection of childcare facilities and national pay scale for childcare workers
- Increase Child Benefit to €155.92 per month for first and second child and €192.85 for third and subsequent children.
- Extend medical card cover to all under 18.
- Range of measures to address educational disadvantage and ensure equality of access
- Funding and strategy to help prevent anti-social behaviour by young people.
- Tax reform including abolition of speculator-friendly/property-based tax breaks.
Time to Deliver on Childcare
For the past year there has been a national debate on the need for this society to care better for our children. The debate has arisen largely due to the intense pressure placed on parents and children and family life in an economy with high demand for labour from employers. But the nature of work itself has also been addressed in the debate and the demand has been raised, as never before, that the work of people caring for children in the home must be fully recognized and supported. The same applies to other carers in the home also.
Sinn Féin has been pro-active on childcare:
- In November 2004 Sinn Féin in the Dáil tabled a motion calling for the development of a comprehensive and accessible childcare infrastructure and a wide range of measures to assist parents, whether caring for children full-time in the home or working outside the home and using childcare services. 50 TDs supported the motion in the Dáil division.
- Prior to the Budget, Sinn Féin published our proposals as our Budget Priorities document Putting Children First.2 In doing so we consulted widely within the childcare sector. The current document, our Budget 2006 Priorities, updates and reiterates those proposals.
- The Dáil debate on the Sinn Féin motion heard Government commitments to develop childcare in the State but the subsequent Budget 2005 was a major disappointment and further fuelled the national debate and the demand for action.
- In response to Budget 2005 we distributed tens of thousands of newsletters throughout the country outlining our proposals and challenging the Government on its failure to deliver. We received an overwhelmingly positive response to this initiative.
- In April 2005 we organized a conference on Childcare in Europe, hosted in Ballymun by our MEP Mary Lou McDonald and under the auspices of Sinn Féin's EU Parliamentary Group GUE/NGL. We heard guest speakers from Finland and Italy describe best practice in childcare in other EU countries.
The National Economic and Social Forum (NESF) published a landmark report on Early Childhood Care and Education in September 2005. In 2000 the National Childcare Strategy stated that childcare provision was "uncoordinated, variable in quality and in short supply".
That this is still the case in 2005 was confirmed by the NESF report which pointed to "the very inadequate implementation of policy on childcare in Ireland and the markedly insufficient financial investment in the education and care of our younger citizens".
The NESF Report has set the benchmark which the Government must now reach.
The basic principle in childhood care and early childhood education is that we must put children first. Whatever measures are introduced must be geared to the needs of children and families, rather than to the needs of the labour market. Parents who wish to provide that care themselves in the home must be allowed to do so and without suffering the major drop in income that so many experience at present. At the same time it has to be recognised that the lack of quality, affordable childcare prevents many women who wish to do so from working outside the home.
The Government's failure to ensure comprehensive childcare provision has negative consequences for children, women, families, society and the economy. Lack of adequate childcare, including pre-school, after-school and out-of-school childcare, continues to restrict the participation of parents of young children, particularly women, in the workforce, in education and in training. There is an urgent need to develop and implement a comprehensive strategy for childcare provision beyond the completion of the Equal Opportunities Childcare Programme in 2006.
The supply of quality childcare places needs to be increased and these places must be accessible to all who need them.
Sinn Féin believes the Government should have the following goals and should work to achieve them within a definite timeframe:
- to enable children to be cared for and educated to the highest standard and on an equitable basis
- to enable all parents to reconcile their childcare needs with participation in the labour force, education and training
- to enable all parents to exercise their choice to care for their children full time up to one year of age
- to enable all parents to access quality, affordable childcare for their children
- to establish universal state provision of pre-school for all children from the age of three to five years
- to establish universal provision of early childhood care and education based on the Swedish system
Sinn Féin calls on the government, beginning in Budget 2006, to:
- Harmonise maternity leave on an all-Ireland basis by increasing maternity leave to 26 weeks paid and 26 weeks unpaid
- Increase Maternity Benefit to 80% of earnings immediately
- Harmonise paternity leave on an all-Ireland basis by introducing paid paternity entitlements of two weeks per child
- Increase adoptive leave to 24 weeks paid and 26 weeks unpaid.
- Introduce paid parental leave
- Provide for universal pre-school session of 3.5 hours per day, five days a week for all children in the year before they go to school, as recommended by the NESF
- Assist parents with the cost of childcare by increasing Child Benefit to €155.92 per month for the first and second child and €192.85 for third and subsequent children and by increasing Child Dependent Allowance to a single weekly figure of €30 for all recipients
- Introduce a Childcare Supplement to be paid as a top-up for Child Benefit for under 5s
- Increase revenue for the Equal Opportunities Childcare Programme, including capital, staffing and operational funding.
- Raise awareness of and increase funding for the Childminders' Grant scheme
- Review the 'Childcare Facilities: Guidelines for Planning Authorities' to assess effectiveness of the guidelines and investigate the possibility of introducing legislation in line with Part V of the Planning and Development Act 2000 to require developers to construct childcare facilities in housing developments and to transfer these to the ownership of the local authority upon completion
- Bring forward legislation to effectively address the need for employers to share responsibility for provision of childcare for their employees
- In line with NESF recommendations, establish a single accrediting body to inspect, evaluate and register all early childhood care and education providers and to ensure that the highest standards are achieved and maintained
- Establish national pay scale for early childhood care and education workers
There is a particular need for the Government to determine the best way to support those parents not in full-time or part-time paid employment and whose work is in the home caring for their children. Such parents should receive supports suited to their needs as they cannot avail of employment-related benefits. The Government should commission a detailed study of this need, including widespread public consultation, with a view to implementing appropriate measures in Budget 2007.
Financing Childcare and Early Childhood Education
- Most estimates agree that at least €1.5 billion will be required in Budget 2006 to address the childcare deficit. This should be seen as a first instalment to fund a multi-annual programme. Anything less will be totally inadequate.
- A core part of the Sinn Féin-supported proposals, the introduction of the universal pre-school session, would cost €680 million for the period 2005-2009.3
- The development of quality childcare will yield increased revenue through tax returns from the participation of those not now able to participate in the workforce and through less dependency on social welfare.
- Overall, the NESF has estimated that for every €1 invested in early childhood care and education a return of €7.10 can be expected.
- The social and economic benefits of improved care and education for children, enhanced family life and work-life balance and the elimination of child poverty, cannot be calculated in euros and cents. Their achievement will be the measure of the real success of our society and our economy.
Income supports for children
As a key measure to tackle child poverty the Government set a target of €149 per month Child Benefit for first and second children by 2005. It failed to meet this target, the rate going to €141.60 in April 2005. Therefore the case for a more substantial increase in Budget 2006 is compelling.
While far more wide-ranging measures are also needed, it is recognised that Child Benefit fulfils a key role in the absence of more comprehensive equality strategies.
Sinn Féin calls on the Government in Budget 2006 to:
- Increase Child Benefit to €155.92 per month for the first and second child and €192.85 for third and subsequent children. (Cost: approximately €200 million)
- To assist those children most in need, increase Child Dependent Allowance (CDA) to a single weekly figure of €30 for all recipients. The value of CDA has decreased dramatically since it was frozen in 1994. (Cost: €187 million)
- Integrate clothing and footwear allowances into the main welfare system, to be delivered in conjunction with Child Dependent Allowances.
- Increase the minimum level of social welfare rates by €15 per week to make progress towards the Government's own target of €150 per week by 2007. (Cost €709 million)
Prioritise the Health of children
While the income threshold for medical card qualification has been increased, it is still relatively low and is one of the greatest causes of hardship in our society. A couple with two children must earn less than €342.50 per week to qualify for the medical card and less than €428 to qualify for the GP only card.
When Sinn Féin tabled a Dáil Question to the Minister for Health and Children Mary Harney on the cost of GP visits she stated that this was a 'private matter' between the doctor and patient. Yet the prohibitive cost of these visits is a cause of real hardship for many and is one of the factors contributing to the crisis in Accident and Emergency wards. The introduction of the GP-only card was an admission of this reality -- but it leaves unfulfilled the government's commitment to extend full medical card entitlement to an additional 200,000 people.
It is widely recognised that the most effective and efficient form of healthcare is primary care, including GP services. To be most effective these services must be accessible in terms of affordability, 24-hour coverage and location.
The Government is duty bound to extend medical card qualification in Budget 2006. In order to target those in greatest need and to ease the burden on parents and children alike, Sinn Féin is calling for:
- Immediate extension of medical card eligibility to all under 18 as a key measure to address gross inequality and real hardship in our health system. (Cost approximately €223 million).
It should be noted that in 2004 the estimate given to us by the Minister for Health and Children for the cost of extending the medical card to under 18s was €116 million. An increase of €107 million in one year raises questions both about the costing capacity of the Department and about the rise in the cost of the medical card scheme itself.
Our call for this extension of the medical card is without prejudice to the need to widen the income qualification. Sinn Féin also sees these measures as transitional as our objective is an end to the two-tier public-private system and its replacement with universal provision based on the principles of need and equity.
Equal Access to Education
A number of recent studies have confirmed that there is a significant correlation between socio-economic background and educational achievement. If this is not addressed we will continue to institutionalise disadvantage in our educational system. For this reason it is essential that resources be targeted where they are needed most. Sinn Féin proposes:
- The elimination of the school building waiting list by 2010. It is totally unacceptable that thousands of pupils and teachers still have to cope with problems such as dilapidation, overcrowding and underheating in an economy where construction is booming. It makes no sense that children continue to be educated in expensive and sometimes rented prefabs while the department pleads a lack of money for their failure to deliver a building or extension.
Tackling disadvantage is particularly important in light of the recent City of Dublin V.E.C report, which showed a heavy correlation between socio economic background and educational achievement. Sinn Féin calls for:
- Increased capitation grants for primary and secondary schools.
- Increased investment in the National Education Welfare Board to enable it to fulfil its statutory obligation to ensure all children and young people receive an education.
- Better cohesion between the Department of Education and the Department of Social and Family Affairs. Social welfare payments designed to help families with children in education such as the clothing and footwear allowance are administered independently of the education system. Educational staff should have some input into this process as they can give a more complete picture of the child's needs than a formulaic means test. Increased funding will be required to support this holistic approach.
- Department of Education review of catchment area boundaries for school transport as a matter of urgency as they date back to 1964. In the meantime the Department should make the money available immediately to ensure that all pupils who attended a particular school, before the fatal bus crash in Meath, can continue to do so. The extra buses should be provided. It is disingenuous in the extreme for the department to claim an expenditure of €150 million on school buses when in fact all they are really doing is introducing safety measures which are long overdue and which they were obliged to do anyway.
- The provision of one-on-one learning assistance should be extended to all special needs pupils who require it, instead of just those with a specific disability. Many pupils with severe learning difficulties are being let down by the system for want of funding. Funding should be made available to implement the All-Ireland module on special needs education as agreed under the Good Friday Agreement.
Young People and Justice
It is vital that all justice policy - but particularly that relating to children - is evidence-based, emphasises measures against social disadvantage and inequality, focuses on assisting offenders to develop the personal and social skills necessary to avoid future offending and understands detention to be a remedy of last resort.
The Children Act 2001 provides for the use of community-based sanctions as an alternative to detention for young offenders. This provision, which the Government have thus far failed to sufficiently implement, is dependent on a well resourced Probation and Welfare Service. The Comptroller and Auditor General's report on the Probation and Welfare Service in 2004 clearly demonstrates the value for money of this provision, estimating that community service orders cost the exchequer about one-third of the cost of custodial sentences. The money saved by Sinn Féin's proposals to make greater use of non-custodial sentences would fund broader initiatives that are key to tackling crime and anti-social behaviour, including community development and recreational services for young people.
This Government's approach to juvenile justice is not based on international best practice and evidence. The proposals of the Minister for Justice, Equality and Law Reform Michael McDowell to introduce Anti-Social Behaviour Orders (ASBOs) and to lower the age of criminal responsibility4 amount to a turnaround in the government's approach to children. ASBOs in Britain have not worked. Research by the Irish Association for the Study of Delinquency found that half of the children before the Dublin Children's Court were given a sentence involving detention, despite the fact that this is intended to be a last resort. Within this group of children there was a clear pattern of educational and social disadvantage.
Sinn Féin is calling for the full implementation of the Children Act 2001 including:
- Increased resources for the Garda Juvenile Diversion Programme.
- A State-wide action plan and adequate resources for the Garda Youth Diversion Projects.
- Full resourcing of conferencing provisions between the child, their parents, the relevant agencies and the victim when appropriate.
- Greater resourcing of the Probation and Welfare Service to ensure the successful implementation of community-based sanctions and supervision of offenders who are placed in detention to reduce the likelihood of future offending.
Making the tax system more equitable and progressive
An equitable and progressive taxation system is essential if we are to bring about real equality in Ireland. Under a progressive tax regime those who have more pay more while those who have less pay less. The current system is regressive where, as in this State, the opposite is the case.
This pre-budget submission calls for the implementation of a number of measures that begin the transition towards such a tax system. Specifically it calls for the elimination of regressive tax practices within the taxation system as these are contrary to the objective of redistribution, which for Sinn Féin must be central to tax reform.
Below we set out a number of simple initial steps which Sinn Féin is seeking to make the tax system more fair and progressive.
Tax expenditures (i.e. tax exemptions and incentives) are generally regressive because they primarily benefit the better off.
The Government has not costed the raft of tax expenditures which exist. It is clear that the cost of many of them is disproportionate to their social value, if any.
Sinn Féin is calling for the retention only of those tax exemptions whose economic and social value outweighs their cost to the exchequer. In such cases, the exemption should be at the minimal rate necessary to bring about the goal for which it was introduced. The exemption of Child Benefit from tax is an obvious example of a socially beneficial tax exemption. The battery of property-based tax reliefs currently under review, and which benefit property speculators and developers, is an example of a regressive tax expenditure and should be set aside.
- Sinn Féin is calling for the introduction of legislative changes to end the ability of wealthy individuals to declare that they are non-resident for tax purposes.
- Sinn Féin is calling for all existing VAT rates to be proofed to determine the degree to which they meet considerations regarding the objective of establishing a progressive tax system based on redistribution and that they be reformed accordingly.
We are seeking such a review because there is a serious concern that a disproportionate percentage (29.96% in 2004) of the tax take in this State is raised through taxes on spending, which are regressive because they hit the less well-off the hardest. This is because low-income families consume a larger proportion of their income and therefore effectively pay a higher proportion of their income as VAT.
VAT and environmental considerations
Sinn Féin believes that it is right to apply different rates of VAT on the basis of energy rating and other environmental reasons (whether the product is recyclable, to penalise built-in obsolescence, etc.) and that in the long run such changes will impact upon consumer behaviour. Such changes have been considered by the Government's Tax Strategy Group.
As consumer demand has generally not resulted in the production of environmentally friendly goods the VAT system should be utilised where possible, and without conflicting with the goal of creating a progressive tax system, to bring about such a change in behavior.
Abolition of the Employee PRSI ceiling
- The employee PRSI ceiling is regressive and Sinn Féin is seeking its abolition.
This view has been echoed by the Department of Social and Family Affairs which stated in 2002:
"Abolition of the ceiling would make the employee PRSI system more progressive. The current system is regressive in that those over the ceiling pay a smaller proportion of gross income in PRSI than those earning under the ceiling. Both receive the same benefits. Abolition of the ceiling would therefore strengthen the social solidarity element of the system in that a proportion of all income would be pooled for the benefit of all contributors."5
It is neither right nor equitable that high income earners (those above the employee PRSI ceiling of €44,180) pay a smaller percentage of their income as PRSI compared to workers on the average industrial wage when both groups receive the same benefits.
Vehicle Registration Tax
- Reform the method by which VRT is calculated.
At present VRT is calculated as a percentage of the real price, including all taxes in the state known as the Open Market Selling Price or OMSP. Sinn Féin is calling for VRT to be calculated on the basis of the environmental friendliness of the vehicle. The aim would be to raise the same amount of revenue but to change the basis on which it is calculated, favouring the trend towards more environmentally friendly vehicles.
A consumer price index which excludes tobacco products.
There is substantial evidence that increasing the price of cigarettes is the single biggest deterrent to young people taking up smoking. However, the Minister for Finance is reluctant to increase the price of tobacco products for fear of fuelling inflation.
Sinn Féin is therefore calling for the exclusion of tobacco products from the consumer price index.
This exclusion exists in both France and Belgium and has been proposed by others including the Irish Heart Foundation.
According to the Minister for Finance the amount of revenue that would be raised from a 50 cent increase on a packet of 20 cigarettes, based on the volume of clearances in 2004, is €107.2m.
Equity for migrant workers
- End the requirement that migrant workers must be in the state two years before they are entitled to social protections.
At present migrant workers who pay tax in the same way as Irish workers are denied social protections until they have been in the State for two years. Organisations working with the homeless have reported an increase in the number of migrant workers who have become homeless as a result of unexpected job loss. The consequences for the children of these workers can be devastating.