Vol. 510 No. 3
4 Mrs. Owen asked the Taoiseach if, further to Parliamentary Question No. 1 of 30 June 1999, he has received the report of the steering group on basic income of phase one of the study covering costs and distributional aspects of basic income; and if he will make a statement on the matter. [21602/99]
5 Mr. Quinn asked the Taoiseach when he will receive the final report of the working group on a basic income; and if he will make a statement on the matter. [21673/99]
6 Mr. Gormley asked the Taoiseach when he expects to receive the final report of the working group on a basic income. [22451/99]
I propose to take Questions Nos. 4, 5, and 6 together.
As I indicated previously to the House, the working group on basic income commissioned a study to be carried out in two phases. The overall purpose of the study is to consider and evaluate the economic, social, budgetary and administrative impact of the introduction of a basic income system. Phase one of the study, which covers the costs and distributional aspects of basic income and entails a considerable amount of detailed analysis of costings, taxation and social welfare matters, is virtually completed.
When the draft report on phase one was considered by the working group, it identified a number of modifications to the basic income structure being analysed. This was envisaged in the terms of reference for phase one. The further analysis required as a result has been carried out by the ESRI and the results and the final report on phase one are expected later this month or at least before the end of the year.
Work is well under way on the second phase of the study which will evaluate the economic, social, budgetary and administrative impact of the introduction of a basic income system. I understand that the working group met to review progress in the past few days, and that the study is expected to be completed by the end of the year.
The Taoiseach did not mention phase three in his reply. Will he indicate when he thinks the work of this group will be completed and when the Government will make decisions on it? Will the Taoiseach agree, given that the Government is committed to introducing a minimum wage by April 2000, that the first £170 per week should be tax free for every person in the State? There is no point in introducing a minimum wage and taking half of it back by way of tax. The Fine Gael proposal is for £170 per week.
Legislation is to be passed by the House on the minimum wage. There is no phase 3. Given that there has to be a green paper on this issue, that might be called phase 3. Following the meeting of recent days I think the work will be finished by the end of the year. The work has been very complex; the more they have gone into it, the more questions are raised. It has been useful work and it will be a useful study. As soon as that work is finished we will look at ways of advancing it and agreeing it with the social partners because it is an initiative under Partnership 2000.
Has the Government taken a decision on the CORI proposal, which would allow for a basic income to be paid irrespective of whether a person was in receipt of a social welfare payment which was below the basic income? This is an issue which concerns CORI.
This work arises out of the CORI proposal. This is what initiated the effort under Partnership 2000. The CORI proposal included the creation of a social solidarity fund. The idea was that additional payments would be made to those who were previously on social welfare so that no one on a low income would lose out on the introduction of a basic income. One of the proposals will be to see how that actually works in effect. In fairness to CORI and the people involved, nobody quite knows how that will happen. That is why the study has been so complex. We have to await he findings of the study to see if that proposal works in the way people thought it out.
The Taoiseach has correctly said this initiative arose from commitments within Partnership 2000. Is it the Government's intention that the findings of this working group will be referred back to the social partners? If so, will the findings include an analysis of the impact of the establishment of a basic income proposal in the context of Ireland being part of a single European market and in the context of the free move ment of labour and European citizens across a population base of 373 million people?
Perhaps people might be interested in the final analysis to see how it will operate. As the working group is made up of the social partners, all the analysis is going back to them. They have been raising the questions and analysing them. I spent some time looking at the study because it so different from anything we have tried in this country before. It is said to be very far-ranging while others have said it is nonsense. I think it is a study well worth doing. It evaluates not only the figures but looks at the economic, social, budgetary and administrative impact of the introduction of a basic income system. It also looks at what one can yield from a basic income system here. I honestly do not know how it will all work out – the winners and the losers and the pluses and minuses at the end of the day – nor can anybody else. If the study is a model, it will be of interest to others. Everybody has doubts and reservations and nobody is sure how successful it will be.
Perhaps the Taoiseach took me up incorrectly or I may not have phrased the question accurately. Is it within the terms of reference of this study that if a basic income system is introduced in the Republic any European citizen, legally resident in the European Union and capable of exercising his rights with regard to free movement of labour under the Single European Act, would be entitled to the benefits of a basic income, similar to that enjoyed by an Irish citizen?
I presume it would but it has not been included in the terms of reference. The position of those on low incomes, enduring hardship, who are disadvantaged and not gaining the benefits will, however, be looked at in the report. Those on welfare would fall within these categories.
From his knowledge of the guaranteed basic income scheme, what would the Taoiseach say are the advantages? Does he agree with the Conference of Religious in Ireland that such a scheme would do much to eliminate poverty traps and with its assessment that Ireland is a low-tax state?
There are some who do and some who do not. It all depends on who one is and where one is in the system. If one is in a low-paid job and drifts into the higher tax band one does not believe that taxation rates are low.
(Dublin West): What if it is a multinational?
I suppose it does if it employs a small number of staff. There are a few which fall into this category. It is an extremely complex area. No one involved in the working group has yet declared that such a scheme would work. We have to await its report. CORI conducted much research and it was worth the effort. The previous Government took the initiative in Partnership 2000 which I have followed. We have had to go to a university either in New Zealand or the United States to find someone to work on it. The theory is that basic income would be taxable at a flat rate but it is acknowledged by everyone that there would be huge losers and gainers. That would not be equitable. This aspect has to be studied.
Assuming the report is favourable, will we see a guaranteed basic income scheme in the lifetime of the Government?
If the working group is happy with the report – I have honoured the commitment to at least look at the matter – we will look at the possibility of publishing a Green Paper on basic income. This would take some time as there are many issues which have not been looked at in the first part of the study.
