Dáil Éireann Debate, Thursday - 16 January 2014
23. Deputy Pádraig Mac Lochlainn asked the Minister for Finance following the the recent analysis by Social Justice Ireland which stated that Ireland’s poorest 10% lost 18.4% of their disposable income since the start of the crash in 2008 and, by contrast, the richest 10% lost 11.4% of their disposable income, if he will support the introduction of equality budgeting or the equality impact assessment of all future budgets. [52791/13]
View answerThe Social Justice Ireland (SJI) report to which the Deputy refers, makes reference to the percentage change in average real incomes by decile of disposable income per adult equivalent between 2008-2011. These figures capture wider effects on incomes over the period which are not as a direct result of budgetary measures taken during the period. A more recent analysis by the ESRI focuses on the impact of budgetary measures and shows that the largest reduction in income on this basis over the period was experienced by those in the top decile. The lowest reduction in income was experienced in the third decile from the bottom. This is consistent with previous analysis by the ESRI, the European Commission and the IMF which showed that the richest bore the highest burden. Whilst it is regrettable that the first decile may have experienced losses of close to 12%, this is far below the SJI estimate of 18.4% and also below the ESRI estimate of the losses experienced by the highest decile of close to 16%. I also note that the ESRI estimate of losses for the top decile is higher than the SJI estimate for that decile.
Maintaining fairness in the budgets while ensuring the public finances return to a sustainable level is of upmost importance and my department has a number of procedures in place to assess the distributional impact of budgets. These procedures include a distributional analysis of taxation measures, published in the budget book and performed on various income levels for the different categories of income earners. These categories include single individuals, married one-earner couples with no children and married one-earner couples with children. Where possible a separate distributional analysis estimating the impacts on disposable income by income decile using SWITCH, the ESRI Tax-Benefit model, is also undertaken in evaluating various taxation options. Illustrative examples are included in the budgetary documentation.
In addition to these measures I would advise the Deputy that my Department received over 700 pre-budget submissions this year from a variety of sources, both from individuals and organisations. It is a standard part of the budgetary process that each submission is examined and taken into account during the formulation of budget measures. This allows for the opinions of a cross section of society to be considered in the preparation of the overall budgetary package.
While achieving a fair and balanced budget is an important guiding principle in preparing budgetary options, the surest way of making a positive impact on disadvantaged people is through jobs and growth. The budgetary measures over the period concerned have been formulated with a view to promoting economic growth and this is reflected in the most recent employment data showing strong jobs growth in the economy and reductions in unemployment.
In addition, beyond the evaluation of budgetary measures; the Cabinet handbook requires a statement on the likely effects of the decision sought on gender equality, persons experiencing or at risk of poverty or social exclusion and persons with disabilities to be included in Memoranda to Government. Furthermore, I would like to reiterate that the State and its bodies take the provisions of equality legislation into account in the development and delivery of policies and services. These procedures ensure fairness and balance in Government decision-making beyond the budgetary process.
