Dáil Éireann Debate, Wednesday - 6 October 2004
131 Mr. Gormley asked the Minister for Social and Family Affairs the policy initiatives the Government intends to take on foot of the recommendations of the recently published ESRI report on relative income poverty. [23412/04]
Amharc ar fhreagra159 Mr. P. McGrath asked the Minister for Social and Family Affairs the position with regard to relative poverty levels in the State and in relation to revised targets for the national anti-poverty strategy. [23364/04]
Amharc ar fhreagra182 Mr. Gilmore asked the Minister for Social and Family Affairs his views on the recent ESRI report (details supplied) which shows that Ireland has the highest level of relative income poverty in Europe; and if he will make a statement on the matter. [23299/04]
Amharc ar fhreagraI propose to take Questions Nos. 131, 159 and 182 together.
The ESRI report referred to was commissioned by my Department and provides an excellent analysis on relative income poverty in Ireland. The report and its recommendations constitute a very valuable input to the strategy for tackling poverty and will be fully taken into account in the future development of the process.
The percentage of the population in relative income poverty is arrived at by calculating the numbers below the income threshold of 60% of median income.
Not all those below the threshold are regarded as being in poverty, as that depends on other factors such as the extent to which their income is below the threshold, the length of time they have been living on a low income, the degree to which their assets will have run down while on a low income, and the other resources they have at their disposal. In the case of Ireland, for example, the indicator does not reflect the high level of home ownership, especially among the elderly, and consequently the value to households of owning their own home. It also does not reflect access to household allowances in kind such as electricity, fuel, telephone rental and TV licence.
As a result of limitations such as these, people under the 60% relative poverty threshold are classified by the EU as being at risk of poverty rather than being in poverty. It was for that reason that in setting targets for a reduction of poverty in the national anti-poverty strategy, another indicator, which measures consistent poverty, was used. This indicator, developed by the ESRI, identifies the proportion below 60% of mean income, who are also deprived of goods and services regarded as essential for living in Ireland today, as measured by deprivation indicators.
The numbers of people experiencing consistent poverty in Ireland fell from 9.7% in 1997 to 5.2% in 2001, as indicated by the latest figures available.
Reducing consistent poverty to at least 2% or eradicating it altogether by 2007 is the overriding objective of our national anti-poverty strategy. It will remain the objective to identify, for priority attention, those most vulnerable and in need from among those classified as being at risk of poverty.
The percentage below the 60% threshold of median income and at risk of poverty rose from 18.2% in 1997 to 21.9% in 2001 during the same period as consistent poverty was falling. However, social welfare rates also increased significantly in real terms during that period — 27% above the increase in the cost of living between 1997 and 2004, which, together with the sharp fall in unemployment, helps to explain the reduction in consistent poverty. The main reason for the increase in relative income poverty, therefore, was the almost unprecedented increases in average incomes, which resulted in the 60% median income threshold almost doubling, for example, from just over €83 per week in 1994 to €164 per week in 2001.
The increases in average incomes have been due to the high levels of economic growth in the past decade which led to: major increases in employment; better paid jobs; more two income households resulting from a significant increase in female participation in the workforce; and lower tax levels in exchange for moderate wage increases to maintain economic competitiveness.
Accordingly, the main groups now classified as at risk of poverty are those who are not in employment or are in low income employment, and have not been in a position to benefit from the employment opportunities afforded by the high economic growth. These include pensioners, people with disabilities, lone parents and larger families, with their children, and the much reduced numbers of unemployed.
It is now almost universally recognised in the EU that the best route out of poverty for those able to work is through employment. Priority, therefore, is being given to removing obstacles to employment experienced by those with family responsibilities, such as lone parents and the parents of larger families, people with disabilities, and the unemployed. This requires ongoing improvements in access to training and education to improve employability, supports with job search and job placement, services, such as child care, and appropriate income supports.
In the case of those who cannot work, improved income support is a key element. The Government is committed to increasing old age pensions to €200 per week by 2007. It is essential also to ensure that focusing on income indicators does not distract from the importance of services such as health care, especially in the case of older people.
The aim should be to ensure provision of the right balance of supports in terms of income and services to maximise the overall well-being of the people in need.
Economic sustainability is an essential feature of the strategic process as it delivers high employment and high employment participation, and thus delivers the virtuous circle of fewer demands on State services and more revenue to finance them. We must maintain the balance which has been developed between achieving the key economic and social objectives, having regard to our current stage of economic development and the need to maintain economic competitiveness.
