Joint Committee on European Union Affairs debate -
Tuesday, 4 Nov 2014

Response to 2014 Country Specific Recommendations for Ireland: Better Europe Alliance

Chairman

As we have a quorum, the committee is in public session. I remind members, our guests and those in the gallery to switch off their mobile telephones as they cause interference with the broadcasting system even when left on silent mode. I ask them to check their telephones now and ensure they are switched off. Apologies have been received from Deputy Halligan.

We are delighted to welcome to the committee representatives of the organisation, Better Europe Alliance, which is an alliance of Irish civil society organisations for a social and sustainable Europe. We will discuss today the response of Better Europe Alliance to the 2014 country specific recommendations for Ireland issued by the European Commission as part of the EU semester process. The joint committee is very keen to discuss this issue. As the representatives will be aware, we made a political contribution to the Commission on the debate on a related issue, which was strengthening the social dimension of the economic and monetary union. On behalf of the committee, I welcome three representatives from the Better Europe Alliance, Ms Michelle Murphy from Social Justice Ireland, Ms Alice-Mary Higgins from the National Women's Council of Ireland, and Mr. Michael Ewing from the Environmental Pillar.

Before we begin I remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person or persons outside the Houses or an official, either by name or in such a way as to make him or her identifiable. By virtue of 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the joint committee. If they are directed by the Chair to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They 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 to the effect that, where possible, they should not criticise or make charges against a person, persons or entity by name or in such a way as to make him, her or it identifiable.

I spoke to our guests before the meeting and I understand Ms Murphy will make the opening presentation on behalf of the alliance. I invite Ms Murphy to proceed.

Ms Michelle Murphy

I am the research and policy analyst of Social Justice Ireland, a member of the Better Europe Alliance. I am joined by Alice-Mary Higgins from National Women's Council of Ireland and Michael Ewing from the Environmental Pillar. I will give the introductory presentation and I and my colleagues will be happy to elaborate on any points in the question and answer session.

The alliance welcomes the opportunity to make a submission to the Oireachtas Joint Committee on European Union Affairs on the 2014 country specific recommendations, CSRs, for Ireland. We believe this committee is in a unique position to monitor both the quality and the progress of the implementation of the CSRs in Ireland at a ministerial an departmental level.

In future, however, the committee could also have a valuable role in ensuring that future CSRs are more comprehensive in reflecting Ireland's delivery of the Europe 2020 strategy, as this is the first year in which Ireland actually has received country-specific recommendations. In this presentation, the alliance will focus on four specific CSRs that are of particular relevance to its members. These are the recommendations on macroeconomic goals, health, employment and unemployment and on low-work-intensity households. Fiscal and economic considerations have dominated the first CSRs that Ireland received from the European Commission in June. These were evident in the macroeconomic objectives outlined in the first recommendation. However, while the third and fourth recommendations have the potential to make improved social and environmental outcomes, it is essential that any fiscal measure flowing from the first recommendation does not impede investment in these areas and takes into account the social and environmental impact and balance of the European semester process and the Europe 2020 strategy itself.

The first recommendation outlines approaches to the achievement of commitments and annual targets in respect of budget deficits and debt outlined in the fiscal treaty and the Irish stability programme. It calls on the Government to enhance the credibility of the fiscal adjustment strategy. The alliance believes strongly that this must include enhancing the social, environmental and public credibility of that strategy through the reduction of poverty and social exclusion and through meeting environmental targets. The alliance is alarmed by the proposal to make the Government expenditure ceilings more binding by limiting the scope for discretionary changes, as this will inhibit any investment in respect of child care or employment, as well as the balance of the Europe 2020 strategy itself with regard to the social, economic and environmental policy positions. While we support the principle of greater public transparency, limiting investment will prevent Ireland from addressing core issues such as poverty and inequality, unemployment, long-term care, social housing, pensions and environmental degradation. We agree with the proposal to broaden the tax base, which is necessary to fund social and public services and in particular, we support the need for taxation measures to avoid negative environmental harm. The alliance also calls for all expenditure and taxation measures to be submitted to a process of poverty, inequality, gender and environmental impact assessments, on which my colleagues are happy to elaborate further during the question and answer session.

The focus of the second recommendation on health is on cost-effectiveness. While the alliance agrees with proposals to address the costs of medicine and to ensure access to more generic medicines, it is essential that the focus on cost-effectiveness and savings in the area of health does not result in making health services less accessible or effective. The objective of improving health outcomes, particularly among disadvantaged socioeconomic groups, must be central to health sector reform. As for the third recommendation on employment and unemployment, we agree with the proposal to increase the level of support provided by Intreo, as well as on the need for a seamless referral system between Intreo and the education and training boards. However, without adequate and sufficient investment, these systems will not function correctly and neither will they meet the needs of those who are long-term unemployed and the imposition of restrictive expenditure ceilings would limit such investment. Second, a strong emphasis on the live register and those in receipt of jobseeker payments actually results in the exclusion of many groups and individuals who are disproportionately represented in low-work-intensity households, in particular those in receipt of the one-parent family payment and the disability allowance.

On the fourth recommendation on low-work-intensity households, we support the principle that any withdrawal of benefits and supplementary payments, as people in receipt of social welfare payments return to paid employment, must be managed through a tapered approach. However, the alliance believes that firm measures are needed to address the issue of insecure employment and low-paid work. This recommendation does not deal with the structural inequalities that act as a barrier to full social and economic participation for many people. We strongly support the recommendation to promote accessible and affordable child care of quality but to achieve this goal it is necessary to have active public investment to provide the quality child care places needed across all parts of Ireland. As I noted previously, the imposition of expenditure ceilings would limit investment in this area.

The alliance would like to comment on some items that are missing from the country-specific recommendations. Overall, the non-integration of sustainability into the European semester process is of concern to the alliance. We also are concerned that particular areas were not included in the CSRs. These include climate change and resource efficiency, poverty reduction and the reduction of social exclusion, pensions, improved access to quality housing, gender mainstreaming, health and long-term care. It is very important that the European semester process is genuinely focused on delivering a balanced and coherent approach between economic, social and environmental policies. The alliance hopes that future recommendations might support long-term strategic thinking and a more balanced approach in respect of social, economic and environmental policies. We also hope that the implementation of the CSRs in 2014 would be managed in a positive, inclusive and constructive manner, reflecting our concerns and insights.

Finally, we wish to reiterate the unique position of this committee in monitoring the implementation and delivery of CSRs in Ireland, as well as the valuable role it can play in ensuring that future CSRs are more comprehensive in reflecting Ireland's delivery of the Europe 2020 strategy.

Chairman

I thank Ms Murphy and will hand over to the floor. Deputy Kyne will speak first.

Deputy Seán Kyne

I welcome the delegation and thank the alliance for its presentation. As it has made a presentation to the Government in this regard, what feedback, if any, has it received from it? While I did not catch it all, Ms Murphy earlier mentioned a process of examination in respect of poverty, inequality, gender issues and environmental impact. By whom precisely does Ms Murphy suggest such examination be carried out? Presumably the examiners would report back to the Government with their own recommendations.

As for the CSRs themselves, this process is ongoing. When members were discussing CSRs this time last year, it was the first time for them because of the European semester process and because on foot of exiting from the bailout, they were unsure of the process that would take place. The Government will be learning from this as to what decisions will be made next year. What would the alliance like to see in the context of the Government's role? How do the witnesses think the Government can learn from the present CSRs? One of Ms Murphy's first points pertained to the first recommendation regarding balanced budgets. There are rules and even treaties that have been supported, such as the stability treaty in 2012 that was voted on by the Irish Government with regard to setting targets. Consequently, these targets are binding and were supported at the time, in part because of the troika and the bailout, but also because people thought that balanced budgets were right and proper and would not lead to the excessive spending that happened in the past. Ms Murphy might comment on that.

Deputy Bernard J. Durkan

I welcome the witnesses and thank them for their presentation. It represents that part of society which makes a major contribution to the well-being of society in general. It identifies deficiencies - as they have done and have correctly pointed out - and plans for the future by highlighting and flagging the issues that will turn up in the future. In particular, I wish to refer to what is missing. I have mentioned this point previously but I remember speaking at a meeting 15 years ago on the availability of quality housing. Although the availability of quality housing was not an issue in Ireland 15 years ago, those of us who were watching the system and what was happening came to the conclusion that a serious problem was arising. It now is evident that the problem is here and is with us and how to resolve it remains the issue. Hopefully, measures are in hand to deal with that in the short term in the first instance and second, in the medium to long term. It requires fairly urgent and remedial action, which hopefully is being taken into account. I wish to reject the suggestion from some quarters - it did not come from the presentation heard today - to the effect that this is a new issue that only appeared in the past two or three years. This is not so, as it has been in the melting pot for the past ten to 12 to 14 years and clearly was there for all who wished to see. However, it was difficult to explain to those who did not wish to see. This always is the case, as the Chairman and I well know from past experience in these areas.

I refer to climate change being an issue.

Climate change is likely to become a more emotive issue in this country. In that regard we must recognise the need to achieve a balance because every so often conclusions are reached without taking into account the entire situation presenting to us. I agree we have to respond to issues to do with climate change, leaving aside the question of global warming, which is an unfortunate reference that has crept into the debate over the years, but in this country we must do that in a variety of ways. I was appalled to hear someone commenting recently that this country's approach to the issue was contradictory. That is not true. We have vital economic interests that must be protected if we do not want our economy to go down the drain, and none of us wants to see that happen. We must find alternative sources of electricity generation as a matter of urgency. It is not possible to separate those two issues. It is not possible, nor is it preferable, to talk about one at the expense of the other. We must recognise the extent to which we will replace traditional generation methods with new methods that are carbon neutral or carbon friendly and address the problem.

The agriculture area in particular is deemed to be a demon, and some suggest that the way to deal with that is to scale down and discontinue the operation. That is not correct and anyone coming to that conclusion is seriously misleading themselves and everyone else. Everything that grows requires carbon in the process, and the resulting emissions are the issue we must address.

In ten to 15 years our cars will be powered by electricity. Otherwise, we will be unable to meet the challenges of the future in regard to climate change. That is a welcome development which we must recognise, but how we generate the electricity is the critical factor. That must be done through means other than fossil fuels. There is no point in pretending we will find some other means to do that. There are no other means to do it. That has been discussed ad infinitum heretofore.

I would have been strongly supportive in a former environment, and I continue to be strongly supportive, of ensuring social justice prevails and that we all recognise the need for social justice and having social justice as a pillar of our society to resolve many issues before they become problems. In that regard, we have had a debate in this country on the taxation of multinational corporations in recent years. Changes have taken place to which we all agreed but we also need to recognise that the remedies proposed for us by those from outside are not necessarily remedies that are readily acceptable or that will necessarily address the problem in the way we would like it addressed. We need to keep that in mind with regard to taxation levels generally.

The debate taking place is that there are those who can afford to pay tax. Everyone recognises that up to 52% of their salary disappears in taxation one way or the other, given the various forms of taxation. We have been behind the European average to some extent in this regard, and the witness stated correctly that we need to be careful how we cross the bridge and move to the area of achieving the same levels as other European countries because they are in somewhat different circumstances to ours to a large extent. They do not all have the same open economy we have, however, and they are not always necessarily affected by the challenges from outside.

We also need to keep in mind that the people on the average industrial wage consider themselves highly taxed at present. The people on €35,000 to €40,000 consider themselves under a great deal of pressure from taxation from all avenues and rightly believe that they will be challenged economically into the future. In terms of a resolution that would impact on them to a great extent, which in theory might sound great, they are not exactly the rich. They are the people who are the backbone of our society and our economy, and we need to keep that in mind.

My last point is on taxation generally. Forty-five per cent of all income tax is paid by 8% of the tax-paying public. As that is increased to 50% the figure is 10% of the tax-paying public, and so on. The group of people who will be affected are at two levels, namely, the average industrial wage level and the next level up. It is the people at those two levels who feel somewhat under threat on the basis that they are at work and believe they are entitled to be rewarded for that work. They fully accept they should pay a fair share of tax but they are concerned the total burden of taxation will be thrust upon them. We recognise that 39% of our total workforce do not pay tax simply because they are not on the wage level that requires taxation. It is sad that that is the case but we have to work ourselves gradually into a position where we can afford to pay for the things we would like to pay for and that we would normally have expected to be able to pay for in the normal course of events.

Deputy Joe O'Reilly

I welcome our panel of speakers. I apologise for unavoidably missing their initial presentations but I will read their written submission and look forward to hearing their responses later. The speakers are an important part of any debate we have on this issue. Any debate about economics, the future of Europe and so forth needs to be tempered with a focus on building society and on the reality of people's lives. We need not talk constantly about abstract figures but the real impact on people. In that sense, I welcome the speakers' input to the debate.

I will raise a few issues which are important to put on record. Not to do so would be negligent because that is what we are elected here to do. On the question of energy, I agree with the basic thesis of my colleague, Deputy Durkan, who is a very experienced parliamentarian and who is very competent, that we have a national interest around agriculture and that involves the lives of people and families. The entire infrastructure of rural Ireland is at issue. For example, in the county in the constituency I represent-----

Chairman

It is plural - counties.

Deputy Joe O'Reilly

Yes, counties, and specifically the county in which I live, the main employer is agri-related food processing, and the entire agriculture industry is centred there. We have to work on the green energy agenda. It has to be central, and we have to sustain that. We have made great progress on developing a culture of recycling in this country, and that has resulted in great progress being made in that area. I remember when it first came on the agenda in local government, of which I was a member years ago, it was almost a foreign concept for consumers. That is no longer the case. People have adapted to the different bins very well and to the entire recycling process, but we also need to move on the green energy agenda.

In the light of scientific development and progress, we will have to keep the question of nuclear energy under review.

I do not say we must opt for nuclear energy, as such, but science has overtaken a number of the difficulties that surrounded it in the past. The methods for dealing with nuclear waste, for example, have improved. We cannot put nuclear energy off the agenda if we accept the problem that exists with climate change. The UN has left us in no doubt about that. Anecdotal and experiential evidence of climate change exists and that behoves us to examine recycling, energy and conservation and to keep green energy on the agenda. It further behoves us to look fairly and squarely at nuclear energy as an option, if it could be done safely and the waste issue were to be addressed. Considerable progress has been made on waste. I do not wish to misquote the former Minister, Deputy Rabbitte, but if I understood him correctly, he said he had no issue with importing energy from countries that use nuclear energy. We must examine the issue. I do not say we have to develop nuclear energy but we must not shy from examining it. The old arguments no longer hold.

I agree with the basic thesis presented that we should broaden the tax base. I would be the first within my parliamentary party and elsewhere to be critical of many aspects of Irish Water, the delivery of services and related issues. No one can deny, however, that the basic objective of Irish Water and the property tax is to broaden the tax base. There are those who like to parade themselves as champions of social justice, a more equitable and broader tax base, based on taxes other than of the traditional industrial worker and lower-paid civil servants who paid everything in the past, but if one wants to champion that cause, one cannot logically do so and not be in favour of broadening the tax base. One cannot logically be against the property tax and water charges, willy-nilly, and then support the proposition that we should have a broader tax base and more equity. That is not sustainable. There is much hypocrisy on the issue.

I welcome the proposal in the submission that we should broaden the tax base. That is precisely what the Government is doing, albeit in a flawed fashion on occasion, and with a need for improvement and the introduction of more consumer-friendly aspects. The purpose of the property tax and water charges is to broaden the tax base. The aim is to take the burden off the backs that traditionally bore the brunt of tax such as industrial workers and lower paid civil servants. There is no equivocation on the matter. One cannot parade oneself on the issue as some seem to do, namely, as a champion of equity, social progress and an egalitarian society where the poor are to the fore. I refer to people in certain political organisations and groups who then say they are against all forms of taxation that would broaden the tax base. That is not a sustainable or honest approach. The two things are incompatible. One would not need a degree in logic to see the positions are mutually incompatible. If one works on the assumption that there is no magic source of money; it is incompatible with social justice to say one should not broaden the tax base.

I say well done to the witnesses in that regard. In their response, could they say that what we are doing with property tax and water charges, flawed and all as they are in their implementation, is the correct economic strategy to look after the poorer sections of society? It behoves people such as they to give leadership in that regard.

Chairman

Deputy O'Reilly is leading the witnesses.

Deputy Bernard J. Durkan

Or charging the jury.

Deputy Joe O'Reilly

Yes, but in this instance there is no avoiding the question. None of us can avoid the issue. One cannot be on both sides of the argument.

I missed the presentation, but if I understood the document correctly, I agree with the stated need for job activation. We should not treat jobseeker’s payments as a paternalistic welfare payment to keep the poor at bay and to keep them fed and leave them in perpetual unemployment. There should be job activation, support, training and education. I am a great believer in that, but a person should be supported when, through human frailty or lack of opportunity due to geography or other factors, he or she cannot get a foot on any ladder. There is no suggestion to the contrary, but where we can introduce job activation measures and training, we should do so and such an approach should be aggressively pursued. I commend the Tánaiste and Minister for Social Protection, Deputy Burton, who has prioritised such an approach to social welfare. We must deliver more. I would welcome the comments of witnesses in that regard.

The experience of Finland and all empirical evidence to date suggests the Youth Guarantee is the greatest vehicle for tackling potential long-term unemployment, social deprivation and generational unemployment. For that reason the Youth Guarantee should be implemented. We are a bit tardy about it. I understand €6 billion is available. I would welcome a comment on the implementation of the Youth Guarantee, where we stand in regard to it, whether we are making sufficient progress and what more could be done.

Child care was cited as an issue. I accept the point. That is the reason we must broaden the tax net and be straight up about such matters. I am a teacher by profession, and from observation and basic savvy, what is needed in child care is to extend the early childhood year to two years. There is no better piece of social engineering to create equality of opportunity, a fairer society and to rebuild a society that has been torn by recession and austerity that arose from a situation of boom and bust. We should introduce a second year of early childhood education. Many of the people who are posturing on the new forms of taxation aimed at bringing equity and broadness to the tax net should address such a question. If one takes a dysfunctional or difficult family, or even the average family, nothing is better for a family than for children to be able to avail of a few hours in a supported environment with qualified people for education and socialisation. It gives the parents a break and provides them with opportunities for work, to train for a job that they might not otherwise have, to engage in job activation and to make applications for jobs. Thankfully, more job opportunities are coming on stream than was previously the case.

Do the witnesses agree that the greatest piece of social engineering in terms of child care would be a second year of free child care? I have argued for its implementation in every forum available. Do the witnesses also agree with my point on the Youth Guarantee and job activation? Do they further agree with what I said on broadening the tax base and that it is hypocritical to be in favour of social egalitarianism, equality of opportunity and fairness and yet to be against measures to broaden the tax net?

Senator Aideen Hayden

Like my colleague, I apologise for not being present for the start of the presentation, which unfortunately clashed with a Seanad meeting that is held at 2 p.m. every Tuesday. I thank the witnesses for the document. I will speak in broad terms and the witnesses can respond accordingly.

My first point relates to the macroeconomic scenario. Even based on today’s figures we are looking at a somewhat better picture than we were even a month ago in terms of the 4.7% growth rate in the economy, which the Commission commented on today. It seemed to be surprised at the extent to which the Irish economy has grown. The growth rate far exceeds the growth rate of our European partners. That, in itself, presents a certain difficulty in the sense that we are somewhat limited by the extent by which we can grow, given the weakness within the general European economy.

It does indicate that we may have more room for manoeuvre than we would have had a year ago in terms of some of the things that we could and should consider. I believe we should have spent more time in the last budget reversing the cuts that we made in previous years, rather than focusing on reducing rates of tax, but that is just a personal view.

Chairman

I am sure the Senator is right.

Senator Aideen Hayden

Could the witnesses be more specific about what type of tax reform they would like to see? We stand at a moment, going forward into the next budget, where we have more room for manoeuvre and it is important that the voices represented by the witnesses be heard very strongly in terms of what type of tax reform is important. Would they share the views of TASC, for example, in regard to some of the proposals that they put forward? Social Justice Ireland has a number of specific recommendations. Are there two or three specific measures that we should be pursuing in the context of economic policy over the next 12 to 18 months? I am thinking of the universal social charge as a possible issue.

In relation to the macro-economic goals themselves, I agree that all changes need to be challenged looking at the complex issues of reducing poverty and social exclusion. There is an issue as to how the budgetary process works, and a number of people would like to see that process changed. This idea that people walk in with a briefcase, or it is announced in the Sunday Independent or The Sunday Business Post a couple of days before the budget itself is announced, is a very poor way to do business. At this point in the year, we should be starting to look at next year's budget and engaging with all groupings about how the budgetary process should work. Do the witnesses have any thoughts on how we as a committee and the parliamentary system overall should be facilitating social inclusion and engaging with economic groups as part of the budgetary process?

One of the specific issues relates to low work-intensity households. The recession has brought a lot of the issues around youth unemployment into sharp focus. In some ways, it seems to be masking more structural issues in the Irish economy. In 2012, I think, the OECD produced a report stating that Ireland had the second-highest rate of households in which no member was actively participating in the labour market. Since that report was published, I believe we have risen to the highest rate. This is not a situation that arose yesterday or the day before. While I agree with my colleague about the importance of the Youth Guarantee, I believe we have a more fundamental problem with labour market activation, particularly for groups such as people with disabilities, women, or older people who are facing discrimination. Do the witnesses have any specific views on how that deep structural problem can be tackled?

In regard to climate change, we have a more immediate problem in fuel poverty. Looking at the statistics that were published in the last pre-budget submission by the Society of St. Vincent de Paul, the amount of money that the average family on social welfare or a low income has to pay just to stay warm has increased by a headline figure of, I believe, about 40% over the last years. People have a right to be warm, and there are measures that we have to take in the shorter term to enable people to be warm in their homes. How could some of the current welfare measures be improved and how do we get to groups that are not currently being assisted through these types of measures?

There is an issue around women's pension entitlements, particularly for older women, and their capacity to take of themselves in older age. How can that be tackled for women who find themselves unable to get pension benefits in older age?

In terms of low-work-intensity households, the partnerships are undergoing a process of reform at the moment. Do the witnesses have any views on that? The partnerships have contributed enormously to overall social inclusion issues and to work participation, particularly in some of the black-spot communities that I am aware of in Dublin and other parts of the country. I would not like to see that process in any way dissipated because the partnerships are fundamental to tackling social inclusion issues.

Access to finance is one of the main issues for low-income households. I am sure the witnesses are aware that the Central Bank recently commented on the need for people to have a 20% deposit to apply for a mortgage, and that they will only be able to borrow two and a half or three times their income. We do not have a rental system that facilitates people living long-term in social rental, and we certainly do not have nearly enough social housing to tackle the shortage, even with the Government's expanded programme. How do the witnesses foresee people being able to access housing in the future, and do they believe that the current financial system is adequate, particularly for the needs of people on lower incomes? We have a certain level of access to borrowing through the credit unions, but do we have a banking system that is adequate to the needs of people on lower incomes?

The issue of mortgage arrears was raised in the country-specific recommendations themselves. It was not specifically mentioned by the witnesses. Given the wide range of groups that they represent, would they have any comments on how the issue of mortgage arrears is panning out, particularly for people who might have been very high-risk borrowers at the time they took out mortgage finance, and who may now be experiencing poverty?

I fully agree with the second year of early childhood education, but there is a need to distinguish between affordable child care and early childhood education. Early childhood education-----

Deputy Joe O'Reilly

It is one factor.

Senator Aideen Hayden

It is of value in itself, and I think that women have a right not to work as well. It is very important that we do not use the two terms synonymously. Child care is not the same as early childhood education. They can be, but are not necessarily, the same thing. Children require early childhood education whether or not their mothers are participating in the workforce. It is important that discourse reflects the need for an element of choice as well as enabling people to work.

In regard to the decision to restore €5 per month on child benefit, do the witnesses favour that over direct provision of, say, State-sponsored child care or of services to children such as school meals through the school or early education systems? Or is there rooms for both strategies - general payments that are not selective versus selective provision of resources targeted at children who need them?

Chairman

I thank Senator Hayden. She has presented a very wide-ranging list of comments.

I would just raise one issue of my own. The Commission is sailing close to the wind in relation to some of the recommendations it is making and may actually be overstepping its mark, particularly in the first recommendation, where it suggests that government expenditure ceilings should be more binding by limiting the statutory scope for discretionary changes. I noted in the witnesses' presentation that they are extremely alarmed by this. I share that alarm, because we have already put in place very rigorous criteria in the form of the fiscal compact treaty, an intergovernmental treaty signed by 25 of the then 27 member states. These criteria are more than enough to enable governments to plan and to keep government expenditure in check. I do not see the need for additional criteria. It is interesting to note that some European countries are now looking for a relaxation of the fiscal compact criteria. For instance, the Italian Prime Minister, Mr. Matteo Renzi, suggests that capital expenditure be included as part of the criteria and France is also examining the fiscal compact criteria. I wonder if the witnesses would agree with me that when it comes to this particular recommendation, the Commission is being overly critical of the Irish State and excessive in its requirements of us. It does not reflect the changing economic environment that we are now entering in the European sphere. Would the witnesses care to comment on whether all of these recommendations are fully current? There is quite a range of comments.

Deputy Kyne has asked me to express his apologies. He had to attend the agriculture committee as well, but will note from the written record the witnesses' responses to his comments.

Ms Alice-Mary Higgins

I will take a stab at responding to this wide variety of issues.

First, we thank the Deputies and the Senator for engaging genuinely and strongly with our presentation and our submission. While as individual organisations we may have very strong and specific views on some of the questions that have been raised, we may not be in a position to state that this is the view of the Better Europe Alliance. The nature of our evolving coalition is broad. We are covering a number of issues but we are not covering all issues as yet, though we would be very happy to respond as individual organisations to the representatives on any of these issues.

To address some of the first questions from Deputy Kyne - and it also links into Deputy Hannigan's point - we agree that the fiscal compact criteria should be sufficient in themselves. We were very clear in our submission that we do not think it is appropriate to seek further binding ceilings on expenditure. Our concern in that regard relates not just to the changing economic and macroeconomic context, but also to the balance within the semester process as a whole. The semester process as a whole is delivering our commitments in terms of fiscal stability but is also delivering our commitments in terms of smart, sustainable, inclusive growth under the Europe 2020 strategy. We are concerned that proposals such as that would compromise the ability to deliver the kind of smart, sustainable, inclusive development that is the ultimate overall goal. That may address some of Deputy Kyne's questions about what kind of proofing or processes are in place.

The important thing is that we have binding targets, which we must meet, but the way in which we meet them should be tested to ensure that a short-term target is never allowed to undermine long-term social sustainability or environmental and other targets. When we talk about practical tools such as the social impact assessments, environmental impact, a stronger application of the regulatory processes we have, and gender mainstreaming - which is pushed strongly from a European level - these are tools to ensure that any measures deriving from the first recommendation on fiscal targets are put through the filter to ensure that they are not taking us a step backwards on the other track of the semester process, which is, of course, Europe 2020. Those tools are available to Departments and it is important that there is also a co-ordinated approach to employing them.

I very much welcome, although it is somewhat outside the scope of our alliance, Senator Hayden's comments on budgetary process. Similarly, there is scope for a much wider use of tools and debate within economic decision-making.

In terms of some of the specifics of child care, for example, we regard child care investment as an example of medium-term investment. It is an investment in safe, sustainable and inclusive growth. It is not simply expenditure, it is investment, because it has a huge delivery in terms of increasing participation in the workforce. That is an example of where short-term targets around debt should not be allowed to undermine long-term delivery of something that is a priority across Europe and particularly in Ireland. I may be straying into the views of the National Women's Council, so I apologise if that is the case, but the question of child benefit is important in responding to the increased costs to inflation and to the large cutbacks in the area of child benefit. In general in Ireland we should not pit one measure that supports children and families against another measure that supports children and families. We have a collective job to do as a nation to move forward on that. I also agree that a year of early childhood education is extremely important. It is an essential step and an affordable, manageable, costed step that could be taken. However, I would also agree that early childhood education is important developmentally for children and for families and is not simply an employment measure. For example, in terms of child care we must also look at out-of-hours care. It is also important - and this is something that may be missing from the current corporate social responsibilities, CSRs, which we hope will be more reflected in the next ones - to recognise that care, be it elder care or care for children, makes an economic and social contribution, which is separate from the facilitation of employment but which has contribution and value in itself.

I will pass some of the environmental issues over to my colleague and also some taxation issues. However, in terms of taxation we must look to the idea of progressivity. When we talk about widening the tax base, progressivity must be a core within that. For example, when we look at the proportion of people who are paying a large percentage of the income tax, they have a larger percentage of the income. We also know from a gender perspective that a significant number of women, 50%, are earning €20,000 or less in Ireland, so the reality is that we have a huge population on a low income. We would like to see the employment targets within the semester process linked more strongly to the quality of employment because we have seen the depletion of wages, which has greatly affected women in particular but all sectors of society and most sectors of employment. That is the quality dimension within employment, to ensure that our achievement of the employment targets is also contributing to the achievement of our poverty reduction targets.

I might ask some of my colleagues to answer some of the other questions. I would like to signal to members that we are discussing the issue of taxation as an alliance. We will be having an event to look at the intersection between environmental taxation and the issues of social equity and inclusion.

Deputy Joe O'Reilly

With respect, it would be helpful if this had already been done. I am not being smart, but that should be in the mix, or we should get off the fence - one or the other.

Ms Alice-Mary Higgins

It is an issue we have been considering and raising. As an alliance, we are growing.

Deputy Joe O'Reilly

I make my point respectfully. There is no equivocal position here; one cannot have two positions. The fact that the property tax is modulated and graduated achieves what the delegation has cited. Why would the delegates not come out and support it unequivocally and unambiguously? Such leadership needs to come from all sectors if we are to get to a new place.

Ms Alice-Mary Higgins

Many of the members of the alliance have positions on the different taxation policies.

Deputy Joe O'Reilly

With respect, we are here to be frank with one another. It is no good if there is not a co-ordinated position whereby one says what might not be popular with everyone but what is right.

Ms Alice-Mary Higgins

Our current work, to which Mr. Ewing will allude-----

Deputy Joe O'Reilly

With respect, the debate will be over at the time. This should have happened months ago.

Ms Alice-Mary Higgins

We are due to have an event on 25 November 2014 at which we will be examining that issue collectively as an alliance. We are also considering the longer-term questions on the balancing of principles, such as the polluter-pays principle and the principles of progressivity. I will let Mr. Ewing elaborate on that. It would not be appropriate for us to represent others when we have not consulted them on a final position.

Mr. Michael Ewing

I thank the members for their interest and engagement. It has been very interesting to sit on this side of the fence and listen to the various points they raised because some of them are quite challenging. On the last point, made by Deputy O'Reilly, we have been in existence as an alliance for only three months. Therefore, to have covered all the bases is pretty much impossible.

Deputy Joe O'Reilly

That is a fair point.

Mr. Michael Ewing

That is why we are working towards agreement on these issues.

On the various environmental issues raised, nearly everybody has raised energy and climate. Clearly, this is in the headlines and is a major issue globally. Deputy Durkan raised the issue of social justice in this regard. I totally agree with him that the matters of energy and climate are very closely allied to social justice issues at a global level. It means caring about the social justice issues affecting people in all Continents, including Africa, Asia and America. We have to take into account all peoples' social and human rights. In responding to climate issues, we must take account everybody's human rights and social justice issues concerning all societies.

We have a very serious problem to deal with in terms of climate. We must reach a target of zero emissions by the end of this century. We need to have an 80% reduction by 2050. These are radical challenges for us. They must be met if we are to survive as a species; that is a fact of science and not really an emotive issue.

Regarding the contradictions in Ireland with regard to agriculture and climate, there is an issue to be resolved. We have to work it out between ourselves. It is not reasonable for people to say we are feeding the world because we are not. We are feeding people from middle-class homes in India and China and other places with our agriculture. It is a perfectly legitimate thing to be doing but it is not legitimate to say we are growing stuff to feed the world because what we are doing may have implications in the longer term for the well-being of a lot of people in other countries in terms of emissions. That said, there is room for us to discuss how we should deal with that. We should be talking right now about how we deal with agricultural emissions in regard to forestry and peatlands and carbon capture in those two areas. It is not a clear-cut issue but a very complicated one.

My father is a farmer and his father before him was a farmer. I live in a farming community in north Roscommon and know exactly the position in the farming community on this but we do have to deal with the issue. It is not a question of just saying we are special because everybody is special. The coal miners in Poland are special, as are the car manufacturers in Germany. Carbon and climate change are very real and difficult issues we have to deal with as a species on the planet.

Fuel poverty is clearly a major issue for many people and needs to be dealt with in a way that also allows for a reduction in carbon emissions. That means looking after insulation and proper housing for people in fuel poverty. A measure needs to be implemented to allow those people to have decent housing that enables them to live comfortably without having to spend vast sums heating inadequate housing. That is the direction to go.

I believe I have more or less covered everything. I welcome the support for green energy. This is a direction to go in. Nuclear energy needs to be debated. There are issues concerning nuclear energy for Ireland in that it takes roughly 20 years to develop a nuclear power plant. In 20 years' time, we will need to be already solving the problem. An issue arises regarding fuel supply in terms of nuclear energy. There is a limited amount of fuel on the planet. I refer only to electricity but there are other forms of heating we need to talk about. There is a lot of scope for local energy production, which creates local employment, particularly in rural areas, through timber and biomass production for home and community heating. There are many steps that can be taken in this regard.

Broadening the tax base in this area in terms of reducing pollution is one of the areas that we, as an alliance, agree we need to talk about a little more. We need to talk about how it should be done and look after the interests of the socially excluded and marginalised. Making the polluter pay is an essential step, and it is a legal requirement in Europe in any case. It is something we should be doing regularly and our tax base should reflect it.

At present, we have a number of arrangements for subsidising activities that are environmentally damaging, and damaging to the climate. We need to examine how to change this.

Deputy Bernard J. Durkan

Such as?

Mr. Michael Ewing

Burning peat is an example. I refer to the burning of peat in power stations, in particular. It is an extremely inefficient way of producing heat. If we were to flood our peatlands rather than burn them, we would actually reduce our national carbon emissions by approximately 20%. That is an obvious example of how one actually resolves the issue to some degree in respect of the farmers' emissions.

Chairman

Does Deputy Durkan want to get back in?

Deputy Bernard J. Durkan

I completely agree with Mr. Ewing's right to hold his views but disagree profoundly with some of them, naturally. The problem with alliances, as we know, is that they cover an amorphous mass of views and seem to contain within them the view that suits everybody's particular menu. Of course, the view that suits everyone's menu suits none.

There are two or three points I wish to make. The first concerns our economy's dependency on food production and the carbon emissions caused by food production. Balance in this regard comes from forestry, grass and various other growing processes. The percentage of any economy in any country that is dependent entirely on fossil fuels is the issue we need to address. We can do so. The way we can replace the fossil fuel economy in Ireland is by replacing production methods associated with fossil fuels.

I am not a supporter of the nuclear industry, about which my colleague has spoken. I do not support it because I believe the residue is impossible to deal with and has never been dealt with.

Deputy Joe O'Reilly

But it has been improved on.

Deputy Bernard J. Durkan

No means have yet been found for disposing of it.

Chairman

Cavan will take it.

Deputy Bernard J. Durkan

In Cavan, they are doing it all right, but the rest of the country has not come to it yet.

Much emphasis is placed on biomass and various other forms of energy generation. This is true but they are carbon neutral. They exude the carbon they have absorbed in the first place; that is all. There is an equal balance. I spent a good number of years on a committee that dealt with this subject and have a reasonable knowledge of it. Some of the statements I hear from time to time on dealing with this issue are totally wide of the mark. The truest method of achieving a balance is to use the ordinary block of wood, the unromantic block of wood that is cut and popped into the grate. There is only one process, namely, the one involving a saw. That is truly ecologically balanced in every sense of the word because there is no other industrial process involved. That is the secret. Many of the other processes have an industrial element. It can be a quite severe industrial process and contribute very considerably to carbon emissions.

Senator Aideen Hayden made a very valid point in regard to child care provision. Both partners in a household should not be forced into the workplace as a consequence of the economic situation. In other words, there should be some measure of choice for families. The reality is that we can spend all the money we like trying to intervene at different levels to correct a particular social deficit or injustice, but the outcome is not necessarily what we plan in all instances. This particular issue goes back to the individualisation of the taxation system and a host of other factors.

It is becoming common practice in recent times to have these discussions in a context where the argument is made that Parliament should be responsible for the allocation of funds. In fact, the Executive is where the executive decisions are taken. Nobody has ever gone forward on the basis of his or her allegiance to a committee. Nobody can seek election on the basis that if he or she is a member of a particular Oireachtas committee, he or she will do X, Y and Z. It does not work that way. Article 17 of the Constitution identifies the role of the Executive and the chief executive in the determination of how and where money is spent and the obligation to carry a message from the chief executive, who is the Taoiseach in this country and would be the Prime Minister in most other countries.

There has been growing support in recent years for the notion that politicians should not be the only people dealing with these types of issues. The view is that there should be some higher sanctum or organisation overseeing matters. That type of system is actually in place across Europe in so far as several jurisdictions have been operating a list system for many years. We do not have a list system because our system of proportional representation takes account of all the whims of the electorate in order of preference. It is the most scientific system internationally with the exception of the Australian system. We do not have to dig into it on a regular basis in order to re-turn the wheel. I have pointed out on many occasions that in many European countries, particularly in recent decades, a type of consensus politics has developed and we see essentially a single government dominating for up to 30 years. All that happens after an election is that one party opts out. It is like Lanigan's Ball, with one stepping out and another stepping in, but the result is a continuation of virtually the same regime. I have studied this at great length and am not trying to make a political point here. When there is no significant change in governance, people can get frustrated and start to wonder whether they should have a different system. However, it is not the system that is wrong; it is simply the fact that we have become accustomed to taking the easy way out and failing to address the issues that continue to present on a daily basis.

I was a member of the convention which drew up the Charter of Fundamental Rights of the European Union. There were many theories put forward by various participants in the course of our work . I was of the view, for example, that housing should be included as a right. I was told eventually by the powers that be - including people representing socialist-orientated governments, I should clarify - that it was not possible to do so because the availability of the required finance could become an issue. I tried to put forward a remedy to address that, but such a provision has not yet been accepted anywhere, so far as I am aware. Another issue that arose was the right to employment. I would have liked to see that included, but it was not possible to do so because of the financial or fiscal exigencies within which we had to work.

There is a general view now that the right to water is a fundamental human right. It is an emotive issue. I agree that access to water is a fundamental right, but the idea goes back to a time when people had to go to the river and take it out in a bucket. Fortunately, we have moved on from there and households now have access to water in a convenient and reliable way. The danger in this discussion is that the issues can become confused and clouded in a situation where we have alliances, some of which are in favour of a particular issue and some of which are opposed. Some groups have very good reasons for holding the views they do, even where one might disagree with them. The bottom line is that we must work within our capabilities and implement improvements where possible. Most of all, we must have regard to what is likely to happen in future, encompassing such considerations as climate change, housing issues, social issues and so on. If we do not do that, we are failing in the fundamental requirement to plan for the future.

Chairman

Does Ms Murphy wish to comment?

Ms Michelle Murphy

Thank you, Chairman. I will try to address some of the issues. In terms of being part of an alliance, there certainly is a range of opinions. It is like being part of a coalition and there is a lot of negotiation to be done. We have only been in existence for three months.

Deputy Kyne asked about feedback to Government. We met with officials from the Department of the Taoiseach today and the intention is to have a regular engagement with them, which should be very productive. We would like to meet with this committee on an ongoing basis, including for discussion on next year's country-specific recommendations and perhaps the annual growth survey. We are all learning from this process. In terms of the impact assessment, we would see the Department of the Taoiseach as having overall responsibility, given its responsibility for the national reform programme, for ensuring the various Departments implement what is set out in the assessment.

We absolutely agree with Deputy Durkan's view on the housing issue. The problem in regard to social housing did not just appear overnight. It has been 20 years in the making and will require investment to address it, which goes back to Senator Hayden's point regarding the cost of rental accommodation. We have a paper on mortgage arrears in which we make the case that while there is a recommendation on mortgage arrears, there are no details on how that goal is to be achieved. If the issue is to be tackled through negotiated solutions such as restructuring, it is very important that households which find themselves in difficulties are facilitated to remain in their homes. Any increased reliance on home repossessions will push those families into an extremely challenging housing market, further exacerbating the problem.

Mr. Ewing has dealt with the climate change issue. In terms of broadening the tax base, the debate in Ireland is very narrow and focused solely on income tax. We are far too reliant on income tax and PRSI. We must examine how to broaden the base by examining issues such as property and environmental taxation. In order to provide the services we need, we must be able to fund them. We need to have a rational discussion about these issues which involves all of society.

As Deputy Durkan observed, issues around water supply and water charges have become distorted. An important consideration is ensuring that those who are most vulnerable and those at the bottom are protected. Senator Hayden referred to fuel poverty, which has become a real issue. Any water charging structure must not push people into water poverty. This is a discussion the Government must have.

The Youth Guarantee is an excellent vehicle for funding, but of the €6 billion that is allocated as a whole, there is €648 million in total for Ireland. A pilot scheme is in place but we have been a little slow to implement it. We hope, in particular, that it will benefit young people who have left school early and are quite far removed from the labour market.

In terms of the budgetary process, two years ago the finance committee brought in groups to discuss how we might have a participatory budgetary process. It is an excellent idea which would involve discussing proposals before they are implemented and trying to determine what impacts they might or might not have. A change implemented in one Department will often impact another. In the case of changes to medical card provision, for instance, there also will be an impact on people in terms of social welfare.

Deputy Bernard J. Durkan

The only problem with that process is that it isolates the majority of parliamentarians, who cannot participate in the debate at all. The only people who participate are the members of the committee.

Chairman

Other Members are entitled to attend committee meetings.

Deputy Bernard J. Durkan

However, they have no vote. In any case, there is no room for them.

Chairman

I presume the process Ms Murphy is talking about would be consultative rather than a voting system.

Deputy Bernard J. Durkan

The Chairman knows as well as I do that where there is an influx of non-members at a committee meeting, the red carpet is not usually laid out for the extra attendees. This is simply because such large attendances can lead to very lengthy meetings. It can become almost like a Second Stage debate in the House.

Senator Aideen Hayden

In defence of the process to which Ms Murphy referred, it has been very productive.

If there is any criticism of it-----

Chairman

Is the Senator a member of the finance committee?

Senator Aideen Hayden

Yes. I was one of the proposers of the pre-budgetary process. My only criticism of it is that it happens too close to the budget. In my opinion it should happen sooner.

Deputy Bernard J. Durkan

The result is-----

Senator Aideen Hayden

Quite often, all of the documentation is available to all Members of the Oireachtas and the proceedings are broadcast.

Deputy Bernard J. Durkan

We all know the result is a plethora of Bills awaiting Committee Stage. It is not possible to get these Bills to Committee Stage because the institution of the House is blocked up.

Senator Aideen Hayden

It is a lose-lose situation.

Deputy Bernard J. Durkan

What the Senator proposes in terms of the finance committee may be possible. The Second Stage tradition of debate in relation to legislation is effectively diminished considerably and is given over to fewer people. That is not an improvement for democracy.

Chairman

There are differing views on the matter. We will move on.

Deputy Bernard J. Durkan

Yes, we can have that debate another time.

Senator Aideen Hayden

May I make one point?

Chairman

Yes but quickly because there are many items of private business with which we must deal this afternoon.

Senator Aideen Hayden

Nobody is doubting that constitutionally this is a matter for decision by the Executive. However, an Executive should operate on the best possible advice available and there should be the widest possible inclusion in the decision-making process.

On the earlier commentary regarding parliamentary systems, there is plenty of evidence among the northern European parliamentary systems that the consensus model is very productive. In relation to rights, there is not an acceptance of progressive realisation in relation to rights such that one can have rights to a home and job but it is acknowledged that they would be realised progressively as the economy and society are in a position to realise them.

Deputy Bernard J. Durkan

We can debate that at another time.

Chairman

We will leave it there. I will allow a brief question from Deputy Eric Byrne.

Deputy Eric Byrne

I wish to apologise to the Chairman, committee and delegation for my absence earlier but I had to attend a lunch with eight European ambassadors who quizzed me as though I was Minister for Foreign Affairs and Trade.

Chairman

It sounds like the Deputy had an interesting lunch. He might tell us about it during private session.

Deputy Eric Byrne

It is just as well I knew as much as I did.

Chairman

I thank the delegation for attending and their comprehensive contributions which will inform further work to be carried out by the committee, particularly in relation to the annual growth survey but also the national reform plan and in the committee's preparations for next year's European semester. I take the point about further engagement in the future and look forward to that. I again thank the delegation for attending.

The joint committee went into private session at 3.23 p.m. and adjourned at 3.40 p.m. until 2 p.m. on Thursday, 13 November 2014.