Joint Committee on Education and Social Protection debate

Social Enterprise in Ireland: Discussion

Chairman

I welcome the witnesses from Forfás, Mr. Martin Shanahan, chief executive, Mr. Declan Hughes, Ms Marie Bourke, Dr. Jonathan Healy and Ms Laura Watts, who will discuss social enterprise in Ireland. From the Equality Budgeting Campaign I welcome Ms Louise Bayliss, Mr. Richard Keane, Ms Emer Delaney, and Ms Louise Riordan. One person from each group will make a presentation initially. When it comes to answering questions other witnesses may respond as appropriate.

Before starting the discussion I wish to advise witnesses of privilege. Witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if a witness is directed by the committee to cease giving evidence in regard to a particular matter and continues to do so, the witness is entitled thereafter only to a qualified privilege in respect of his or her evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. The presentations that witnesses have submitted to the committee will be published on the committee website after this meeting. Members are reminded of the long-standing ruling of the Chair to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable.

I now invite Mr. Shanahan to make his presentation.

Mr. Martin Shanahan

I thank the Chairman and members of the committee for inviting Forfás here today to discuss our report, Social Enterprise in Ireland, Sectoral Opportunities and Policy Issues. A detailed briefing note of my presentation has been circulated to members. With the Chairman's permission I will take that as read and will draw out some of the key points from the presentation.

Before beginning I will introduce my colleagues, Declan Hughes, divisional manager with responsibility for enterprise and trade policy and Marie Burke with responsibility for education and skills policy. We are also joined by Dr. Jonathan Healy and Laura Watts who are policy advisers and were involved in drafting the report under discussion. Forfás is the national policy advisory board on enterprise, trade, science, technology and innovation. We work closely with our sister agencies, IDA Ireland, Science Foundation Ireland, and Enterprise Ireland in the development of enterprise policy. We provide advice on a diverse range of policy areas which impact on enterprise, whether that is enterprise development, research and innovation, competitiveness, research and development, economic infrastructure and so on. We also have a role in the development of the Action Plan for Jobs and identifying sectoral opportunities and opportunities to create jobs. The report we are discussing fits into that area of our work.

Social enterprise in its broadest form is not a new concept in Ireland. In every community there are examples that were established because individuals grouped together to meet a need that was not being met by the State or by commercial businesses. In all aspects of Irish life community and voluntary organisations such as the Gaelic Athletic Association, GAA, Muintir na Tíre, the Irish Countrywomen's Association, ICA, agricultural cooperatives and credit unions have been the backbone of the social fabric. All of these organisations share a self-help ethos and philosophy and place themselves at the centre of their communities.

For our report a social enterprise is defined as an enterprise that trades for a social purpose; in which at least part of its income is earned from its trading activity; is separate from government; and in which the surplus is primarily re-invested in a social objective. Income from trading is an important distinction, as organisations such as pure charities may derive their income solely from philanthropy, grants or donations. In commercial enterprises, profit is divided among owners and shareholders, but in a social enterprise the profit, or the surplus, is generally re-invested in the social objective.

The Forfás report identified four main types of social enterprise in Ireland, those with commercial opportunities that are established to create a social return, for example, a restaurant whose profits or surpluses are used to fund a disability organisation; those creating employment opportunities for marginalised groups, such as employment centres for ex-offenders; economic and community development organisations, for example, community-run enterprise centres; and those that deliver services, such as community crèches or rural transport groups. These goals often overlap or the social enterprises have multiple objectives.

There is limited data available on the size and operation of social enterprises in Ireland. We have used statistics from 2009 to demonstrate the scale. Approximately 1,420 social enterprises employing over 25,000, with a total income of approximately €1.4 billion existed in 2009. This is equivalent to just under 1% of enterprises in the economy and over 1% of total employment. Social enterprises are labour intensive, with payroll estimated to account for 64% of total expenditure. This group of 25,000 that we have identified is a subset of a wider not-for-profit sector which employs over 100,000 people. Our report concentrates on the social enterprises at the commercial end of the not-for-profit spectrum.

Our report concluded that the sector has the capacity to double employment with the creation of an additional 25,000 jobs. We arrived at this conclusion having examined the levels of social enterprise in other jurisdictions and the averages across the European Union.

The Forfás report makes a number of recommendations to contribute to developing a vibrant social enterprise sector to support jobs in communities across Ireland. While a number of these recommendations are specific to social enterprises, many are recommendations that impact on all small and medium-sized enterprises from across all sectors of the economy.

The recommendations centre on six themes. There is a need to develop a policy for the social enterprise sector. There is also a need for an over-arching policy for social enterprise development to include adopting the definition of social enterprise as outlined, developing a co-ordinated approach to the sector across government and increasing our understanding of the sector, including the collection of appropriate data and metrics. A number of Departments are currently engaged with the sector, the Department of the Environment, Community and Local Government, the Department of Social Protection, the Department of Health, the Department of Agriculture, Food and the Marine and the Department of Jobs, Enterprise and Innovation.

The second set of recommendations relates to capacity-building and business skills development, including the promotion and replication of existing business support models and working towards ensuring that social enterprise is mainstreamed in all business courses to help in further developing the sector. The third set of recommendations deals with procurement, including supporting social enterprises in the same way as conventional SMEs can be supported by Government. This is to enable access to tendering processes. Social enterprises face many of the same challenges in this regard as commercial small and medium-sized enterprises. There is also an opportunity to influence social outcomes through procurement.

Funding and finance are dealt with, including assisting social enterprises in building capacity for business plan development to make access to finance easier so that they can take out loans on a commercial basis. There are multiple potential streams of income including philanthropy, grant-aid and commercial income. Many social enterprises derive their income from a mix of these sources. The sector wishes to achieve a greater level of income from commercial trading.

The remaining themes include developing leaders and harnessing community support and expertise and the theme of governance. A broad range of potential governance models exist and it is important that social enterprises choose a model which best supports their business activity.

The recommendations were developed by examining existing international policies and evidence, literature review and a wide range of engagement with stakeholders in Ireland. Since the publication of the report an interdepartmental group has been established and chaired by the Minister of State, Deputy Seán Sherlock with a secretariat provided by the Department of the Environment, Community and Local Government. The group is currently examining the recommendations of the Forfás report and is establishing a timetable for implementation.

Social enterprise is a growing enterprise sector that can bring further job gains and deliver economic potential as part of Ireland’s economic recovery and growth for the future. Like other SMEs, social enterprises have the benefit of being geographically spread throughout Ireland. They are set at the heart of rural and urban communities. Very often they employ those who are most marginalised and who find it most difficult to access employment opportunities. They tend to provide local services and so jobs are created in local communities. As well as multiplier effects from the direct jobs in the sector, further indirect jobs are created either by enabling the development of other enterprises, for example, by social enterprises that assist economic and community development, or by providing services that attract people to a community such as local festivals or community-run hostels.

The Forfás report sets out a list of recommendations to help ensure a supportive and enabling environment for a vibrant and growing sector of Irish enterprise. I welcome any questions from members.

Chairman

I am aware that some members may have to leave the meeting early. Although these are separate topics I suggest we take the next presentation now so that members can ask questions before they leave.

Ms Louise Bayliss

The equality budgeting campaign is a broad organisation made up of civil society and including groups such as the Irish Feminist Network, the National Women's Council of Ireland, trade unions SIPTU and UNITE the Union, Migrant Rights Centre Ireland, SPARK and the Union of Students of Ireland.

Equality budgeting is an approach to economic policy-making and planning that places equality at the centre of decisions concerning public expenditure and income. Through equality audits and impact assessments, equality budgeting provides information on how different sections of society are impacted by specific economic policy measures. The objective of equality budgeting lies in ensuring this information is used to reduce inequalities and to achieve the best equality outcomes for specific disadvantaged groups, but also for society at large.

Equality budgeting goes beyond traditional approaches to policy-making and planning by assessing the impact of expenditure and resources on different sections of society; by assessing who does or does not benefit; by integrating equality as a driving principle; and by increasing transparency in the budgetary process. The benefits of equality budgeting include increased levels of information, disaggregated data, impact assessment and increased levels of equality, such as knowledge of who is disproportionately impacted and evidence-based policy design. There are increased levels of transparency which will make it easier for the public to accept the budgetary process. Equality budgeting originated in the 1980s in the form of gender budgeting pioneered in Australia. Over 60 countries have implemented or have worked toward equality budgeting, including Canada, South Africa, the United Kingdom, Tanzania and Uganda. Some work was done in Ireland within the gender mainstreaming unit of the then Department of Justice, Equality and Law Reform.

We have chosen the Scottish model because Scotland is a similar country with similar procedures. In Scotland the equality and budget advisory group, made up of government and civil society representatives, works with the Scottish Government on devising the budget and the equality-proofing of economic policy measures. A draft budget is published in September before being finalised in January. An equality statement is published alongside the budget which highlights equality outcomes by theme, such as health and well-being, or by equality characteristics, such as gender, race or age. A full impact analysis is conducted. In-depth research on the effects of the economic crisis and the minutes of the EBAG meeting is published on the Scottish Government website.

Equality budgeting is very necessary, particularly as Ireland has a seat on the UN Human Rights Council. It is essential to make good on promises regarding economic, social and cultural rights. In January 2011, a UN expert, Magdalena Sepúlveda Carmona criticised Ireland for failure to respect economic, social and cultural rights during the period of the economic crisis. Our groups is lobbying for equality budgeting to be introduced by means of setting up a unit with responsibility for integrating equality horizontally across all economic policy processes and planning, with particular reference to the nine grounds of the Equal Status Acts. This unit should be given the power and resources to undertake or commission research on the impact of the economic crisis and to equality-proof existing and future economic policy measures.

We argue there is a need for equality budgeting. Budget 2012 was acknowledged to have had the most detrimental impact on lone parents. According to the analysis undertaken by the Department of Social Protection this trend continued in budget 2013. It stated that this budget had the most negative impact on working lone parents. The 2011 EU-SILC report contains the most up to date information on poverty and deprivation. It shows that 24.4% of the general population suffer two or more forms of deprivation, yet this rises to 56% in the case of lone parents and their children, 32.6% higher than the general population. The rate of consistent poverty was 6.9% for the general population but 16.4% for lone parents. I will give two examples to highlight decisions made on education and protection which would have an impact and which may not have been implemented if there had been equality budgeting analysis.

Had the type of economic analysis we are advocating been done, it is possible that neither of these issues would have arisen.

The first example relates to the impact on the educational prospects of the children of lone parents arising out of changes to the one-parent family payment. Ireland has an excellent education system. The third level sector, in particular, should be applauded for its efforts to make further education accessible to all socioeconomic groups by way of grants and through the excellent higher education access route, HEAR, scheme. A major difficulty arises, however, as a consequence of the cut in child benefit for all 18 year olds, which took no account of situations where dependants aged 18 might still be in school or where a parent is reliant on social welfare. The child dependant rate is €29.80, which is supplemented for under 18s by the €30 per week child benefit payment. That payment ceases once the child reaches 18 years of age. Although no research has been carried out on this issue, we have heard anecdotally of children being forced to leave school early - children who a year later would have access to the HEAR scheme and the grant system through Student Universal Support Ireland. That is one example of the type of inequality arising from decisions of the Government.

A related example is the prospect, in July 2015, of an estimated 63,000 lone parents losing their entitlement to the one-parent family allowance. Now is the time for these parents to avail of training and education in order to be job-ready. Under budget 2014, however, second payments to lone parents who avail of FÁS or education and training board courses were discontinued. This measure effectively bars these lone parents from taking up training and education opportunities. In both these cases, an impact assessment would have highlighted the issues arising and might have ensured these disadvantaged groups were not unfairly affected.

Chairman

Thank you, Ms Bayliss. I will now take questions from members, beginning with Senator Averil Power.

Senator Averil Power

I thank the witnesses for their presentations. Their point is well made in terms of the necessity for equality budgeting in the context of the broader social consequences of budgetary measures and, in particular, their longer-term impacts. I was very strongly opposed to the proposal last year to take teachers out of DEIS schools, a decision that was subsequently and rightly overturned. When we asked the departmental officials who came before the committee whether they had thought through the longer-term economic consequences of this proposal, not only for education but also in the areas of justice, social housing and so on, their answers were not reassuring. There should be a requirement when decisions such as this are being made that consideration be given to the consequences across all sectors, particularly in the longer term, in order to ascertain whether the particular measure really does represent value for money. There have been several cases, including cuts to drugs projects and so on, in which individual Departments took account only of their own budgets, with no consideration for the knock-on consequences on a broader scale. That is a deeply dysfunctional approach.

Reference was made to the Minister of State, Deputy Sean Sherlock, heading up a committee on social enterprise. I do not have any information on how well that committee, which I understand was established in July 2013, is working and whether there have been any outcomes from its deliberations. Has it indicated, for example, that it will accept all of the recommendations from Forfás? I accept it is early days in the committee's operation, but I am interested to hear what progress has been made.

An interesting point was made about the need to ensure business students are educated about the non-profit sector and social enterprise. How many of the colleges provide that type of training? I am aware that Trinity College does, or certainly did in the past - in my final year there I did a course in managing voluntary organisations. Only a small minority of students would have taken that course, but it was an excellent offering. I do not know whether other business schools and faculties take a similar approach. Some of the basic principles of business are the same across all sectors, but in the case of social enterprise the overall perspective is totally different. It is important to ensure that all business graduates have at least some understanding of what is involved in working in the third sector.

Deputy Aengus Ó Snodaigh

I welcome the delegates. I have followed the campaign for equality budgeting closely and listened carefully to previous presentations that were made to Oireachtas Members. A delegation from the committee will travel to Scotland in the coming weeks to get the view of the authorities there on how equality budgeting has worked for them. Although the situation in that jurisdiction is somewhat different in that its Parliament does not have the full powers enjoyed by the Oireachtas in terms of budgetary control, it is a country of similar size to Ireland and its experience will be instructive to us. Has an evaluation been done of the effectiveness of the Australian model or any other model of equality budgeting? Australia was one of the first countries to take action in this area, with Scotland being a more recent convert. The delegates indicated that 60 countries are considering implementing some type of measure to take heed of how budgetary measures affect the public from the perspective of equality. Can they expand on that?

There is some confusion regarding the data on inequality in Ireland. In a reply to a parliamentary question recently, the Minister indicated that Ireland now scores better on equality than it did in the past. Other sources have claimed differently. In the delegates' view, have recent budgets had a worse or better impact in terms of equality than previous budgets? Has that analysis been undertaken? The recent period of austerity followed fast on a period of perceived abundance. It would be interesting to know whether the budgets delivered during those two distinct periods differed greatly in terms of their impact on inequality.

Deputy Joan Collins

I thank the delegates for their presentations. I do not have many questions for Mr. Shanahan because, in general, Forfás is doing a good job. He indicated that Forfás steps into the breach where private companies are not delivering innovations in certain areas and where public bodies are not providing services. Does it initiate particular programmes when it identifies a need? Mr. Shanahan told us that Forfás intends to create 25,000 jobs up to 2020. Where does he see those jobs coming from? The not-for-profit initiative is a good proposal because it will see resources going back into communities. It is the right way to go.

I am a strong advocate of equality budgeting. The impression I am getting, however, from replies we have received from both the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, and the Minister for Finance, Deputy Michael Noonan, is that the view from Government is that sufficient safeguards are already in place in this regard. The new whole-of-year budgeting reform, we are told, functions as a checking mechanism, with each of the Oireachtas committees having a role to play in ensuring proposals are equality-proofed. I am assuming the delegates would refute that position. Have they undertaken any analysis to support their argument for the establishment of an equality budgeting advisory group to oversee equality checks and balances in the pre-budget process? The Government's position seems to be that there is no need for such a body and that everything is already in place. How might we go about devising a baseline to show there is a need for such a body and that there are still instances in which inequalities arise? The question is how to find the resources to do something like that, given that it would require input from economists and other experts. A group that might have been able to play a role in this regard came before the committee recently when its funding was withdrawn. Do the delegates envisage undertaking that type of analysis and, if so, how might it be done?

Chairman

I invite Mr. Shanahan to respond to that group of questions.

Mr. Martin Shanahan

I will begin with Senator Averil Power's question regarding the committee on social enterprise that is operating under the Department of Jobs, Enterprise and Innovation.

As the Senator correctly pointed out, the Minister of State for research and innovation, Deputy Sherlock, has assumed responsibility for this area. He chairs an interdepartmental group which was first convened in October and which has met on three occasions since then. At the first meeting of the group, Forfás made a presentation in which it set out the actions it felt were required. The same actions are set out in our report and we have just outlined them for this committee. I understand the interdepartmental group is developing implementation and prioritisation mechanisms in respect of those actions. It is also engaged with the sector in this regard.

On the extent to which this area is included within business courses, we consulted a number of educational institutions while the study was being compiled. As a result, we are aware that UCC has a centre for co-operative studies and that DCU, TCD - to which the Senator referred - and UCD run some courses in this area. These courses tend to be specifically related to the not-for-profit sector. One of the points we make in our report is that it needs to be mainstreamed within other business programmes so that a wider audience can be reached. There are other ways for business graduates to achieve exposure to and experience in this area. The sector would benefit from the entry to it of such graduates, whether on a voluntary basis or through some of the schemes that exist within the public sector.

Deputy Joan Collins referred to our intention to create up to 5,000 jobs. To clarify, Forfás's role is to advise on areas of opportunity and indicate what should be done. A number of Departments have direct responsibility in this area and they form the membership of the interdepartmental group to which I referred earlier. I refer here to the Departments of Agriculture, Food and the Marine, Arts, Heritage and the Gaeltacht, the Environment, Community and Local Government - which plays quite a significant role - Jobs, Enterprise and Innovation, Health and Social Protection. All of these Departments run schemes which support and interact with the sector in different ways. The potential for creating 25,000 jobs was identified by examining what is happening and the levels of social enterprise that have been achieved in other countries. The average percentage of GDP in countries across Europe that is accounted for by social enterprise currently stands at 6%. The EU has set a target of 9% in this regard. If we were to achieve a figure of the order of 6%, employment in the sector would increase. In fact, it would more than double. We suggest that achieving what other countries are achieving is a reasonable target. Spain, Italy and Scotland - which was mentioned in the context of the other presentation - are good examples in this regard.

The areas in which these jobs may be created vary greatly. The one thing about social enterprise is that it is both varied and widely dispersed. It is not concentrated around large urban areas and much of it is rural-based. We are talking here about everything from community shops to post offices, tourism and heritage products, leisure and sports services, energy production, etc. We have included a number of case studies in our report which provide a flavour of some of the more significant types of social enterprise involved. We see jobs being created both through growth in these enterprises and through the arrival of new ones.

Ms Louise Bayliss

In respect of Deputy Ó Snodaigh's question about whether inequality is increasing, we are of the view that this is the case. It has been shown to be increasing, and the gap between the richest and poorest in Ireland increased by 25% in 2010. The ESRI analysis of budget 2013 showed that the latter was regressive in nature. Other reports from 2011 and 2012 also indicate that successive budgets have been regressive. Another point to highlight relates to the fact that decisions are being made in the absence of information. At a time when they are particularly scarce, resources must be allocated to areas in which they are needed most. Four days after the passage of the Finance (No. 2) Act 2013, the ESRI published a report showing that the bottom quintile had again incurred the greatest loss. I do not believe very many Deputies would have voted for the legislation had this information been available to them. We are seeking a very simple move whereby the information in question will be made available on the day of the budget in order that when decisions are being made, people will know that what they are voting in favour of is fair.

Senator Power made the point that decisions are not being made on an interdepartmental basis and that this has a long-term impact. That is absolutely true. Decisions being made by the Department of Social Protection are not being followed through by the Department of Education and Skills. This is giving rise not only to a social impact but also to an economic impact, which is not being considered. There is a need for a more holistic approach. If the information to which I refer were provided, it would lead to the adoption of such an approach.

Mr. Richard Keane

We probably need a bit more joined-up thinking. If people can discuss economic inequality at Davos and if Paul Krugman can write about it in the Tuesday edition of The Irish Times, then surely members, as parliamentarians, could be given additional information in order that they might base the decisions they make on the budgetary process. The World Bank rated Ireland 35th out of the 43 countries it assessed for financial scrutiny of legislation. Dáil Éireann does not have a parliamentary budgetary office. Twelve OECD countries now have such offices. Impact analysis is not provided with draft budgets or the legislation that accompanies them, such as the finance Bill, the local property tax Bill and the social welfare Bill. Guillotines are regularly imposed in respect of critical budgetary legislation. Amendments from Members of Dáil Éireann are almost never accepted during the legislative process. Parliamentary oversight of Cabinet proposals seems to be minimal.

There is a way of opening this process out in order that we will not be presented with budgets that appear to involve power plays between Departments. Those who are affected most by budgets do not have access to well-oiled lobbying machines. The various surveys that have been carried out indicate that those at the margins of society and in the lowest decile have been affected most by recent budgets. We would like a more open and transparent process in respect of the budgetary cycle. There are specialists who can be consulted. I refer, for example, to the department of equality studies and the school of social justice in UCD and the Equality Trust in the United Kingdom. The Spirit Level: Why More Equal Societies Almost Always Do Better, by Wilkinson and Pickett, which was published two or three years ago, has been quite influential. We propose that the ESRI and the Equality Authority might be best placed to conduct an equality analysis in this country as part of the annual budgetary cycle.

Ms Louise Bayliss

To return to Deputy Joan Collins's point, we could do that posthumously in respect of the past three to four budgets in order to assess the impact and to assess whether it would have a positive impact going forward.

Ms Emer Delaney

The research carried out by the group in Scotland has been very influential in the context of examining what can be learned from hindsight and from what has already been done.

Senator Marie Moloney

I thank our guests for attending. I wish to make a comment rather than ask a question. What Mr. Keane is talking about is reform and that is what we are fighting for every day of the week. The entire system needs to be reformed. We are continually arguing about the need for reform, particularly in the Seanad. We are not allowed to accept some very good legislation or amendments to Bills brought forward by the Opposition because we are governed by the Whip. The entire system requires an overhaul.

Mr. Keane is correct in the context of the need for joined-up thinking. Last November, the Revenue Commissioners contacted people in order to discover the means by which they intended to pay the local property tax for this year. I know a number of individuals who indicated that they intended to pay it out of their widow's pension. That was grand, and when they went online, their request to pay in this way was accepted.

All was well until last week when some of these widows got letters indicating that the Revenue could not take the money out of the widow's pension because the Department of Social Protection did not allow it. This has occurred after they had all indicated that they intended to pay the tax in this way. It is crazy that this was not done beforehand. The reason the Department has given is ludicrous. It stated that if a widow pays X amount a week towards the local property tax - €4 a week or whatever - it would take her income below the threshold for the tax. It is saying that one needs to pay one's local property tax but not on its watch - one must pay it somewhere else. If the Department is determining that the widow cannot pay it because it would bring her payment below the threshold, how does it expect her to pay it? We need joined-up thinking across Departments.

Ms Louise Bayliss spoke at length about child benefit and I agree with what she said. She should not think for one minute that this issue has not been thrashed out. We have had spent days thrashing out the different ways we should approach this issue. We have groups lobby us to means-test child benefit; others have lobbied us to tax it and others still have lobbied us to have vouchers for the children going to school. There are varied opinions on how to tackle this issue. If we were to means-test it, we would probably lose more than we would gain. How would we means-test all the recipients throughout Ireland at this stage? Perhaps it could be done with new applicants when they fill in the form. How can we go about means-testing what is being paid out in child benefit? I thought there was merit in the idea of giving vouchers to the parents which would be used in the schools to cover the cost of school books and school lunches and in that the funding would be used for the child. People say it is a universal payment for children and it should not be taken away. With child benefit, it is a case of "damned if you do and damned if you don't".

The child dependant allowance has been a bugbear of mine because it is paid alongside all benefit payments. A recipient of a short-term payment will not get the allowance if the child is over the age of 18 and going to school or college. If one gets sick, it is as if one's children do not matter in that one will not receive payment in respect of the child over the age of 18 but will only get payment in respect of those children who are under age, so to speak. If one is dependent on social welfare and has a child going to college, one will get a top-up payment for that child, the special rate of third level grant, which is great, but if that child came from Kerry and moved to Dublin, that payment would not even cover their accommodation costs. One has to then supplement one's child in college out of one's social welfare payments. It is crazy. Not everyone passes their exams the first time around and they may have to repeat a year, but if a child has to do that, he or she will not get the grant. It is very hard on parents who are totally dependent on social welfare to put their children through college. Are we going to return to the days when it was only the rich who would go to college? This is where equality comes into play.

I agree that we should have equality budgeting. We have tried to get budgets, particularly the social welfare budget, in advance in order that we could scrutinise them, but unfortunately that does not happen. It does not come to us beforehand. The Minister will come and tell us how much she has to take out of the budget, but we do not get the specifics until the day it is announced. When one is working with the people on the ground, one knows the specifics of the budget that will hurt people and what will not and what is acceptable, but unfortunately we do not get the specifics of the budget until the day it is introduced and then we debate it afterwards. It would be good if we could have the budgets in advance but we have not come around to that idea yet in this country.

Senator Fidelma Healy Eames

Ms Louise Bayliss

No; we are a voluntary organisation.

Senator Fidelma Healy Eames

How are the witnesses collating their data and what expertise do they have on their team? They might tell me a little more about that.

With regard to the disadvantaged groups, did Ms Bayliss say "working lone parents" as opposed to lone parents?

Ms Louise Bayliss

In respect of the last budget it was working lone parents, but in the case of the budget I mentioned first, the 2012 budget, it was all lone parents.

Senator Fidelma Healy Eames

We need to hear a little more about working lone parents. If we take the case of a lone parent who manages a family and works but who is disadvantaged as a result of that, such treatment is a clear breach of the principle of equality. How are disabled people and the self-employed who have lost their businesses faring?

I thank the witnesses for attending. It would be good to get this on a very firm footing.

Deputy Stephen S. Donnelly

I thank the Chairman for letting me crash her committee. Both of these issues are very dear to my heart and I very much appreciate being able to attend.

Chairman

I might crash the Deputy's committee sometime.

Deputy Stephen S. Donnelly

The Chairman would be very welcome. I can assure her it is not as interesting as this.

My first question is to Mr. Shanahan from Forfás. The 2012 report is an excellent one. I ask him to take the following comment in the spirit in which it is meant. The report's recommendations are a bit fluffy. That is not the fault of Forfás. They are fluffy because Forfás is trying to advise and it is up to the Minister or the Government to put real meat on the bone. Whenever I hear the phrase "interdepartmental committee", I cringe. What is happening on the ground? It is fantastic that the Minister of State, Deputy Sherlock, has been appointed to this group. Has anything started to happen, specifically in terms of money, resources and legislation? I would like to know the answer to that.

My second question is on the microenterprise fund. I have spoken to some of the people co-ordinating social enterprise in Ireland. One of the points they made is that the social entrepreneurs cannot or will not access the microfinance fund, even though there is a good deal of money there.

My understanding is that it has not been drawn down. I cannot remember the specific technicality, but it had something to do with having to be a director of the social enterprise and opening up someone to personal liability. It was a constraint around the microenterprise fund. Does Ms Bayliss know anything about this or if that is changing?

I have a third question. According to Ms Bayliss's data, we are at less than half of the European average in terms of social enterprise, which to me was a surprising finding because, as she rightly said, this country has an extraordinary tradition of volunteering and huge social cohesion. It is astonishing that Ireland is at less than half the European average, given our heritage, tradition of volunteering and social cohesion. Will Ms Bayliss give one or two reasons she believes we are way behind in that regard?

Equality budgeting is something I strongly support. I co-authored the submission to the Minister for Finance, Deputy Michael Noonan, and the Minister for Public Expenditure and Reform, Deputy Brendan Howlin. The most striking aspect for me was that Oireachtas Deputies and Senators received the ESRI report on income distribution in the budget four days after the Finance Bill had been signed into law. One of the main requests of the Equality Budgeting Campaign is for Members of the Oireachtas to have that type of analysis on budget day. I have had a direct response from the Minister, Deputy Michael Noonan, which states he was not doing it. I have not heard yet from the Minister, Deputy Brendan Howlin, but if he also says "No", I am willing to bet that they are the only two Members of the Oireachtas who do not believe Members of the Oireachtas should have the right information. Fianna Fáil and Sinn Féin support equality budgeting. I would say the vast majority of Independents support it and will hazard a guess that most Labour Party Members support it. Regardless of one's perspective on whether there should be greater equality, I am guessing that the two Ministers are the only two of the 226 Members who are publicly stating we should not be given the information on what the budget we are voting into law will do. I find this extraordinary and it is fantastic that this committee is taking up the issue. It could be the conduit in applying some pressure from the Dáil. The response the Minister, Deputy Michael Noonan, has given is that they are not willing to do it because Members already receive the information. I have a view on the quality of that information, but as a member of the Equality Budgeting Campaign, does Ms Bayliss believe the information provided for Oireachtas Members on budget day in the budget "deck", to which the Minister, Deputy Michael Noonan, is referring, is sufficient and does it qualify as useful and substantive quality analysis?

Chairman

As I am the last questioner, I will ask my questions before Ms Bayliss replies. I am very much in favour of equality budgeting, but I do not necessarily agree with all of the views of Ms Bayliss's group. For example, I am not sure that basing it on the nine grounds mentioned would be the right approach because the bottom line for me is income equality. We can divide people into sectors and omit many others. The latest Central Statistics Office income and living survey has found that throughout the country there are couples with children, people who are single, lone parents and so on who are insolvent and struggling to pay mortgages. That kind of model would not take this into account. The bottom line should be income equality.

To give an alternative view on some of the issues the delegates have raised, the SILC survey carried out by the ESRI offers a flawed model because it does not include capital taxes. Many wealth taxes were brought in. Capital gains tax, DIRT and so on have been increased, but that is not taken into account. Other taxes were increased also. There is a story in The Irish Times today based on a parliamentary question I asked. In 2011 the Government implemented a proposal of the previous Government, whereby an effective tax rate of 90% was imposed on bonuses above €20,000 for bankers. Some €1.3 million was collected in 2011 and there were no bonuses above that amount in 2012. In the same year the threshold for the universal social charge was increased and last year it was increased for wealthier people over 65 years. So far, the CSO income living survey has not shown a widening of the gaps in income. The latest survey was carried out in 2011 and the next one could show such a widening; I do not know. I would not prejudge it, but I am simply saying there is other information available. The OECD states it has the most progressive income tax system in Europe and we have the third most progressive income tax system in the world. That is because of recent changes, largely implemented by the previous Government towards the end of its term. The delegates are putting one side of the argument, but others can be made. The picture is not as bleak as that presented by them.

I would be glad to hear comments on the points I have made. I call Ms Bayliss to respond to all of the questions asked.

Ms Louise Bayliss

On the point about the CSO's survey of income and living conditions, the Chairman is right that it does not take into account capital taxes or take into account cuts in public services.

The bottom quantile have suffered more than any other in the most recent budgets. That is factual.

On some of the other points raised, I take on board what the Chairman said about income equality. That is one of our biggest concerns, but there are other issues, including access to public services. However, I agree with the Chairman that income inequality is affecting people in every sector in their day to day living. As the Chairman rightly pointed out, a two-parent family with a mortgage could be equally as poor as a lone parent and dividing it like that can sometimes be blunt. What we are trying to achieve is income equality.

Mr. Richard Keane

We are open to critiques, but we should start the reform process. We should pay a study visit to, say, Scotland. We should have some know-how from the School of Social Justice or the ESRI. There are many people who have the skills and know-how required.

Mr. Martin Shanahan

Ms Louise Bayliss

Mr. Martin Shanahan

Ms Louise Bayliss

Mr. Richard Keane

Ms Louise Bayliss

Ms Emer Delaney

Ms Louise Bayliss

Ms Louise Bayliss

Mr. Richard Keane

Mr. Richard Keane

Ms Louise Bayliss

Ms Louise Bayliss

Ms Louise Bayliss

Ms Louise Bayliss

Ms Louise Bayliss

Ms Louise Bayliss

Ms Louise Bayliss

Ms Louise Bayliss

Ms Louise Bayliss

Ms Louise Bayliss

Mr. Richard Keane

Ms Louise Bayliss

Mr. Martin Shanahan

Ms Louise Bayliss

Mr. Richard Keane

Ms Louise Bayliss

Ms Louise Bayliss

Ms Louise Bayliss

Mr. Richard Keane

Ms Louise Bayliss

Mr. Martin Shanahan

Joint Committee on Education and Social Protection debate -
Wednesday, 29 Jan 2014