I will provide commentary and responses and Sr. Reynolds will then take over. Before anyone leaves, I refer to one of the core issues. It is very important that people understand how poverty is measured. It is not measured in any way that was discussed here today. We must be clear when we are discussing poverty. There is an agreement among the 27 countries in the European Union about how poverty is to be measured and it has been signed off by all Governments. Research is conducted under the guidance of EUROSTAT and in Ireland it is done by the Central Statistics Office. It is not based on calculating averages under any circumstances, a point I wish to reiterate. If this were the case it would be absolutely true that one could never eliminate poverty. However, this is not the way in which it is measured.
Sometimes, I hear people say that because they live in Dún Laoghaire or Dalkey and because Bono lives up the road, people in these areas could be in poverty even though they earn €100,000 per year. That is not true. Permit me to explain. The calculation of poverty is measured by an estimate of the actual value of the income of each individual person in society. This involves a breakdown of income in all households. Net income is what is under discussion, that is, the money in people's pockets after tax is paid and welfare received. This is the disposable income available to people.
This amount is calculated in a household as follows: the first adult is allocated the value of 1 unit. A second or any other adult is measured as 0.66 and a child is allocated as 0.33. Two adults and one child would amount to two individual adults under these calculations, which are somewhat technical but this is how it is done. The result is what is known as equivalised income. Let us imagine it visually. One lines up all people in society from the lowest to the highest income earners. The average is not calculated, but one selects the person in the middle. That is what the median means. One selects the person in the middle and calculates the poverty line as 60% of that person's equivalised income. Therefore, if there are several millionaires who become billionaires, it has absolutely no effect on the median. The same person remains in the middle and the wealthy are still at the top of the income spread or distribution. It is very important that this calculation should be based on 60% of the median, which is what they have all signed off on and on which all the research is based. We advocate this method in Europe.
I will revert to the case of Ireland presently but Ireland has been making progress on reducing poverty in recent years. Considerable progress has been made, a fact we have acknowledged and recognised. However, there is still some way to go and we should not set low targets. The eradication of poverty is not about everyone having a 1m wide television screen, a souped-up car or six weeks holidays during the year. This is not how poverty is measured. Ireland uses an additional measure called consistent poverty. This includes several other measures of what society considers essential, such as having good waterproof shoes or a coat or being able to buy clothes or have proper food. There are ways of measuring these things. However, the basic line is the income line and this is the way it is done in Europe and it is the simplest way to do it.
I pointed out that it is possible to reduce poverty in this context. Let us consider the European reality. There are 80 million people in poverty below a certain income level throughout the European Union. A reduction of 25% of that figure is referred to in the draft document. That is what is in the draft Europe 2020 strategy. We are saying we should not let them take it out. It is very important that it is defended.
I take Deputy Costello's point very strongly because Ireland has been doing better than that. The next phase of the Europe 2020 strategy is supposed to be rolled out to individual targets within countries. Consequently, it would be critically important that if there is to be a reduction of 25% in poverty across Europe there should be a reduction of 25% in poverty in Ireland. In fairness, the overall numbers at risk of poverty in Ireland have fallen from over 20% to 13.8%. The overall number should fall by a quarter of that between now and 2020. It is not a difficult target; it can be done. If we could reduce the figure to less than 10% by 2020, it would be good. It should be done.
We have not been nearly as good at dealing with child poverty, the rate of which is far higher at 17% or 18% and affects many people. When one calculates the numbers, one finds if there had been no progress on poverty we would be at a different level today. In reality, initiatives taken by the Government have resulted in reducing poverty by 225,000 people. There are 225,000 fewer people in poverty today in Ireland than would have been the case if the percentages had not been reduced. That is an acknowledgement of serious progress. It is also a recognition that we have some serious distance to go, which is the other side of the argument and needs to be taken on board.
On the comments regarding the European reality compared to the Third World, Sr. Brigid Reynolds and I have both worked in Africa for more than a decade so we are well aware of the kinds of difficulties. It is critically important that progress be made on both fronts. The fact that there is a level of poverty in the Third World is no justification for saying we should not be tackling poverty in Europe. Of course we should tackle poverty in Europe and reduce it, but we should also be taking positions within the WTO talks and various other talks and agreements in place which would make a substantial difference to poorer people in the Third World.
The European Union should have a special relationship with Africa because all the colonial powers in Africa, with one small exception, came from the European Union. Ireland is well placed within this context because it was not a colonial country and is seen as a country which strongly supported emerging countries in Africa. I would like to see, within the context of the questions raised by Senator Quinn, Ireland putting some serious effort into supporting African poverty issues and addressing them within the international talks and so on. Ireland plays a substantial role and I acknowledge that its Third World aid is at a very good level, although it has been falling. In the last two budgets we argued it should not have been allowed to fall further. I strongly argue it should not be allowed to fall further. The target percentage of GDP set should be met.
In Africa, Ireland and the European Union there are four core values which should guide policy and should be worked for. One is human dignity. The second is sustainability, which includes economic, social and environmental sustainability. Equality is a critically important issue and includes human rights. The fourth is the common good. They are the four guiding values which we strongly argue should be at the core of the European Union's approach to development and its approach to development in Third World countries. It should also be at the core of what Ireland does.
In that context, another question was raised by Senator Quinn on the Third World and poorer countries, namely trying to achieve 20-20-20 goals. Nuclear power and genetically modified food were mentioned. It is much more important that the terms of trade be fairer. I have serious reservations about the kinds of colonisation of seeds in Africa which have been carried out by multinationals. They take seeds, patent them and then produce the next generation. The people who have lived in the area for thousands of years and have generated crops do not get any benefit from the patenting of seeds. I would like to see that issue dealt with.
On the issue of nuclear power, I remain to be convinced it is necessary. We have a serious energy issue and Ireland, in particular, has a serious energy issue which needs to be dealt with. It could be a discussion for another day.
