Economic growth, employment and poverty
Maureen O’Sullivan asked what headline growth, debt and employment figures meant for people facing low wages and poverty, and questioned the limits of relative-income poverty measures. Bruton cited employment growth and reduced poverty risk among people returning to work, while accepting that poverty measurement could be refined.
We are coming towards the summer recess next week and when we come back in September it will be into budget time. Already, the pre-budget submissions are coming in and no doubt the Government will want to show the growth, improvement and recovery, as it did with the spring economic statement. Just looking at two statistics from the spring economic statement, the general Government debt is down to 105% of GDP and it is expected to go down by another percentage, and GDP growth last year in Ireland was the highest in Europe. What do those statistics mean in real terms to Irish people? What is being presented statistically as improvement, indicating the healthy state of the economy, is actually masking the reality in Ireland. The fine rhetoric and the statistics would give the impression that we are a template of how to turn a financial crisis around. No doubt it has been turned around for some people, but those statistics are masking the suffering of Irish people. I am talking about those on low incomes, lone parents and people with disabilities. I am talking about a community sector working on a shoestring budget and yet providing valuable services in child care, education and in addiction services.
In terms of housing, 3,300 people in Dublin alone are in emergency accommodation and the Dublin City Council housing manager states it cannot cope such is the extent of the problem. Looking at the disconnect, we have the growth and the health of the economy statistics and the reality. How can the statistics mask the reality? I suggest the answer lies in the way we measure poverty and that the current system is unbalanced. One statistic from the current system is that 6.2% of people are in consistent poverty. There are parts of Dublin Central and other parts of the country where the number in consistent poverty is double or treble that. We need to look beyond mere economic indicators as the only indicators determining our prosperity and well-being. For example, in the gross national happiness index, there are 33 indicators, including health, education, socio-cultural participation, community vitality and ecological diversity.
Does the Minister accept the need to look beyond a simplistic monetary measure as the sole indicator so that the Government will have real and comprehensive information about people's lives that would guide policy for the next budget?
Comment on this
I certainly do but I would also say there is tangible improvement occurring. There are now 105,000 more people at work since we started the Action Plan for Jobs. That is 105,000 people's lives back on track. It is also 105,000 people who are contributing on average €20,000 per year into the Exchequer in terms of savings, which amounts to €2 billion available to the Exchequer to deal with many pressing problems.
As the Deputy will be aware, 2015 was written down for another year of cuts, had the troika forecast been accurate, but instead, because we have made progress on employment and other adjustments, we have been able to put money back this year. We have put money back into special needs. We have made provision in health and in many areas of pressing need. We have increased the budgets for the homeless by 22%. Certainly, it is not enough. The economy is a work in progress. I certainly will not rest still until we get back to full employment. We can deliver that by 2018 but it means we have to continue to deliver policies that will allow that sort of growth.
Deputy Maureen O'Sullivan is correct to say that we need to have broader measures of economic welfare than simply economic ones and that we need those wide indicators of sustainability, etc. That is part of the way in which we need to develop impact indicators. Many Departments are developing such impact indicators and, increasingly, they are working to indicators and publish them along with the Estimates so that people can see the impact of how the money is being spent on important measures of performance. I agree with the Deputy that we need to have those broader measures but that cannot deviate from the fact that had we not got 105,000 people back to work, we would not have €2 billion to put back to provide some relief for families for the impact of the past number of years.
Comment on this
A drop in unemployment figures is always welcome but some of those who are now employed are working on wages that do not allow them to live in dignity; it is not a living wage.
Returning to the measure, within the EU, poverty is measured by using relative income poverty lines which involves working out an average or median household income. However, there is a limitation in that regard. In choosing a cut-off point, it is arbitrary and it does not take other factors into account - for example, how far below the poverty threshold people are and the length of time that people have been poor. Therefore, we are not getting a comprehensive picture of the intensity, duration and persistence of poverty and there is a need for other measures that would provide a holistic approach to give a true picture of poverty.
I referred to children living in consistent poverty and we know from the organisations working with them that there has been an increase. That did not happen by accident but came about because of Government policy. If poverty and inequality are to be really reduced and not only statistically, then the Government needs that comprehensive accurate information to guide policy and that is not coming from the current framework for measuring poverty. As long as that continues, the disconnect will also continue between what the statistics say and the reality on the ground.
Comment on this
I agree we can always refine the measures. The measure that struck me most dramatically from my recent reading of the poverty report was the dramatic reduction of poverty for people who go back to work. The risk of poverty is seven times higher if one is out of work than if one is in work. The progress that the strategy has delivered, through Pathways to Work and Action Plan for Jobs, to get people back into employment has made an impact. Some 141,000 people left the live register last year to enter employment and they saw their opportunities improve.
It is not the case that these are all part-time jobs. Some 91% of those additional 105,000 jobs are full-time. Most of them are in strong well-paying sectors, such as ICT, manufacturing, construction and financial services. They are right across the spectrum. There are some in retail and in hospitality where pay levels would not be as high, but we are now in a position to establish a Low Pay Commission to look at the pay levels of those who are on low pay and to gradually, over time and based on evidence, increase those payments. There is a dividend coming through as we get our economy back on track.
I agree with Deputy Maureen O'Sullivan that we need a wider range of measures. I know from colleagues that people are straining at the leash to be able to invest more in services but we can do that only as we deliver the dividend that is coming from our successful economic approach.