Trevor Sargent
Ceist:160 Mr. Sargent asked the Minister for Finance the means he will employ to tackle income disparity here. [25432/01]
Written Answers. - Income Disparity.
As evidenced by our record to date, and continuing efforts in this regard, this Government has given a consistently high priority to tackling poverty. Actions have been taken, and continue to be taken, over a number of fronts. These include continued strong growth in employment, total employment increased by 21% between 1997 and 2000. This increase has been associated with a 53% fall in the unemployment rate over the same period which reduced from 10.3% in 1997 to 4.3% in 2000. By the second quarter of 2001, it had further decreased to just 3.7% with a long-term unemployment rate of 1.2%. Employment is expected to continue to grow, albeit at a lower level than in recent years; the introduction of a minimum wage which was increased in July of this year to £4.70 (5.97) per hour and will be further increased to £5.00 (6.35) per hour from 1 October next year; personal/PAYE allowances/credits have been increased and standard rated; as a result of the increases, the threshold below which no income tax is paid has been increased over the past four years from £71 (90.15) per week to £144 (182.84) per week. The increases also mean that the number of income earners outside the tax net now stands at 32.6% of all income earners as compared with a figure of 24.9% before the 1998 budget, that is, tax year 1996-97. There are now almost 613,000 outside the tax net as compared with 346,000 before the 1998 budget. The standard rating has equalised the value of personal allowances for all taxpayers regardless of their income, thereby increasing the equity of the system; a PPF commitment that, over time, all those on the minimum wage will be removed from the tax net. As already stated, the present threshold is £144 (182.84) per week. There have been unprecedented increases in social welfare payment rates. For instance, the personal rate of old age contributory pension has already increased by 36% since 1997 from £78 (99.04) per week to £106 (134.59) per week now – more than achieving the commitment in our action programme of reaching £100 (126.97) per week by 2002. Over the same period, the lowest rates of social welfare have increased by 28% from £65.40 (83.04) per week to £84 (106.66) per week with a commitment in the PPF for substantial progress towards a figure of £100 (126.97) per week. There has been a major programme of investment in child benefit, widely acknowledged as the most effective means of tackling child poverty. Current commitments mean the rate of payment of child benefit will have almost quadrupled to £117.50 (149.19) and £146 (185.38) per month by 2003 compared to the position in 1997.
These and other actions across the key headings identified in the national anti-poverty strategy of educational disadvantage, unemployment, income adequacy, urban disadvantage and rural poverty have contributed to a real improvement in the living standards of all in our society. This is evidenced by the very dramatic progress which has been made in reducing the levels of consistent poverty. The most recent data published by the ESRI indicate that the numbers experiencing consistent poverty at the 60% income line, that is, having less than 60% of average household disposable income and experiencing enforced basic deprivation, had fallen from 15% in 1994 to 8% by 1998. In light of the progress in improving living standards across the board since then and, in particular, the continued increase in employment, it is expected that the position will have further improved in the intervening years. Clearly, we are well on the way to achieving our target of reducing levels of consistent poverty to below 5% by 2004 and, indeed, this target will again fall to be considered as part of the ongoing review of the national anti-poverty strategy.