Dan Boyle
Ceist:5 Mr. Boyle asked the Minister for Social and Family Affairs her views on the recently published Green Paper on Basic Income; and if she will make a statement on the matter. [19551/02]
Ceisteanna – Questions. Priority Questions. - Basic Income.
The recent publication of the Green Paper on Basic Income by the Department of the Taoiseach fulfils a commitment in the last Government's action programme. The purpose of the Green Paper is to encourage debate among the wider community on the benefits of basic income while also identifying the effects of such an approach.
The introduction of a basic income system in Ireland not only would represent a fundamental shift in the way in which we organise social protection in this country but would also imply a radical overhaul of the taxation system. It is likely that such a shift, would have major implications in the short and long-term for both our society and our economy. The Green Paper plays an important part in summarising those implications together with identification of the main advantages and disadvantages associated with the proposal. Some of the advantages which are claimed for the basic income approach include a simpler social welfare system, the removal of poverty and unemployment traps and of take up problems, the provision of an independent income for all, including those not in the paid workforce, and a more effective mechanism of tackling relative income poverty.
The Green Paper also identifies a number of problems with the basic income approach having significant negative implications for the economy. Essentially these arise from the need to apply a single income tax rate of 48% on all income to fund the basic income scheme as proposed. While there is room for discussion of what the appropriate rate might be, it is likely that the system would result in a significant rise in the tax rate for many people. If the cost of the system was estimated on the basis of current social welfare rates rather than those which were actually used for estimation, the tax rate would be higher or incomes of many social welfare recipients would fall.
Of particular interest to me as Minister for Social and Family Affairs is the assertion that a basic income system would produce a simpler social welfare system for both clients and administrators. However, the proposed system would involve the introduction of a social solidarity fund to respond to the many cases where the basic income as proposed would unacceptably reduce disposable incomes.
Essentially, this would mean the introduction or reintroduction of a number of targeted means tested schemes and the Green Paper notes the possibility that "this modified basic income approach would thus be just as complicated to administer as the current tax/social welfare system and negates many of the perceived attractions of basic income".
The key test in any radical proposal of this nature is whether the gains which are claimed can be achieved through a more gradual reform of the existing system. The Commission on Social Welfare in 1985 briefly considered a basic income type approach but rejected these in favour of reform of the existing mixed systems. Those who argue in favour of a basic income system will have to make a convincing case as to why such improvements cannot continue to be made in the context of the current system, rather than opt for the uncertainties and risks of this approach. I look forward to the discussion and debate on the topic arising from the publication of the Green Paper.
Given that the publication of the Green Paper is a commitment the Government made out of the Programme for Prosperity and Fairness, does the Minister think that her job is now done or does she see this progressing beyond the debate stage to perhaps a White Paper, to legislation or to the adoption of basic income principles in our social welfare system?
I am disappointed to hear the Minister trot out the income tax level needed, a canard that has been used on a regular basis. The money can be raised in several other ways, such as through indirect taxation or the social insurance fund. It is a matter of how we collect tax and how we prioritise the spending afterwards. I encourage the Minister not to leave this important paper, which we welcome, on the shelf to allow it to form the basis of an ongoing debate that will then lead to a more detailed Government response. If the Minister takes that approach, many of us here on the Opposition benches would welcome it and would be willing to further progress on an ongoing basis.
This is a Government Green Paper and is not specifically under my jurisdiction or in my responsibility, although I have responsibilities in the context of the social welfare system and I have expressed my views, which would probably be contrary to an extent the Deputy has stated. However, it is an opportunity for people to see the issues concerned, evaluate the figures, bring this matter to the attention of the wider community and encourage debate. Once the Green Paper has been completed and the debates held we will await progress thereafter.