The impact of the various austerity measures over recent years has been, and continues to be, felt by families in every corner of the country. Whether it is pay, public services or social welfare; all measures point towards a drop in living standards that has been hard felt. Recent data from the CSO quantified the average decrease in income for households since 2008 at 14%; of course it has been much more difficult for households on mid-to-low incomes to absorb this decrease.
The most recent NERI Quarterly Economic Observer (Spring 2014) points towards a slow recovery in the Irish economy over this year and the next. After almost six years of austerity, growth is slowly re-emerging with notable reductions in unemployment and increases in employment. The combined impact of higher growth, recovering consumer spending, more tax revenue and less social welfare spending is impacting positively on the Government’s finances. The outlook suggests that there will be less pressure for austerity measures in October's Budget (Budget 2015).
As the long-overdue recovery begins to emerge, it seems time that we as a nation begin to consider the type of Ireland we want to live in. Aside from this being a long-overdue national discussion we have avoided for decades, the lack of a ground-plan for our future socio-economic direction only increases the chances that we slip back to previous ways.
It is important that such a discussion occurs and that is it broad based and inclusive of the diverse views that make up our society. Economists, like myself, bring one set of views (around taxes, government spending and public services), while others offer different and equally valid perspectives. Indeed, there have been excellent contributions to date over a series of lectures and public addresses from President Higgins on an ethical economy and the development of an inclusive and creative society. Similarly, the latest Social Justice Ireland publication, ‘Steps Towards a Fairer Future’, points towards some of ingredients of a more sustainable future. Wearing an economist’s hat, a few questions and thoughts strike me as we think about the ideal shape of the future:
• We do not want to go back to the Ireland of the early 2000s – although times were good for many it was an unsustainable position that has cost us dearly.
• We need to decide as a country whether we want to deliver key services through the public sector or the private sector (not far from the Boston versus Berlin question of a few years ago). It can be either but we need to decide on it once and for all. To me the choice of high quality efficient publically provided services seems obvious – but let’s decides rather than muddle along as in recent years.
• A decent income, through decent work and a decent social welfare system, needs to underpin living standards for all individuals and households across the lifecycle from childhood to retirement.
• We need to once and for all break away from the burden of high property prices (and consequently high rents) that impact so severely on the living standards of households – most particularly those on low and middle incomes. We cannot afford to inflict another generation with mortgages and rents that so consume their income that they have limited funds left each month to make ends meet.
• Could we fundamentally transform our system of childhood education so that all children can receive two to three years of early childhood education and that all primary schools are property equipped – classroom prefabs should become a thing of the past. We radically transformed our national road network; could we do something similar for children?
• Could we reform working patterns and lifestyles to make them more family friendly? In many jobs (not all) workers could work 4 long days rather than 5 shorter ones - why not?
• If we want a more inclusive society, we will need to take measures to actively pursue this. Closing income and earnings divides, addressing education disadvantages etc will all require active policy initiatives and investment.
While there are many other changes, goals and objectives (too many to mention here), the few outlined above illustrate the need for us as a society to start thinking about where we are going. Achieving these, while simultaneously retaining a stable fiscal position, requires greater socio-economic planning. Across the divides (left, right etc) there may be marginal differences in outlook and implementation, but overall as a nation we should be able to pull together a roadmap towards a better Ireland.
Dr Micheál Collins is Senior Research Officer at the Nevin Economic Research Institute (NERI). This article is a summary of some points made at a lunchtime seminar at the recent CPSU ADC in Galway and appears as an article in the latest edition of Aontas.