John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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I ask those present to turn off their mobile phones as the interference caused by them affects the sound quality of the transmission of proceedings. I welcome the representatives of the European Anti Poverty Network: Mr. Robin Hanan, who is the director of the Irish branch of the network; Mr. Paul Ginnell, who is its policy officer; and Ms Bríd O'Brien, who is the head of policy and media of the Irish National Organisation of the Unemployed and the chair of the European Anti Poverty Network's Irish policy group. As part of the committee's work on budget 2017, it was agreed to carry out a post-budget analysis and to engage with various organisations to discuss the budget. The committee particularly welcomes comments on the outlook for future budgets.

I draw the attention of witnesses to the fact they are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given. They are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable. I invite Mr. Ginnell to make his opening statement.

Mr. Paul Ginnell:

I thank the committee for this opportunity to address it. I will quickly go through the presentation I sent to the committee in advance of today's meeting. It might be too long for the time allocated to me.

We welcome this opportunity to present our analysis of budget 2017 and to suggest ways of improving the poverty, gender and equality impact assessment of policy. We have welcomed the creation of the Committee on Budgetary Oversight and the independent parliamentary budget office, which will come into action soon. We believe it is significant and important that the programme for Government contains a commitment to develop the process of budget and policy proofing. The programme for Government also commits to the development of a new integrated framework for social inclusion to tackle inequality and poverty. It is hoped that consultation on this framework will begin shortly.

The European Anti Poverty Network Ireland has produced an outline of its proposals for an integrated anti-poverty strategy. Copies of this document are available in case members have not already received it. I am moving through the presentation quickly. The current situation is not positive. Our presentation includes a chart that shows how poverty has increased in recent years. Inequality has also been increasing since 2009. We believe these key issues need to be addressed. This committee has an important role in ensuring policies are supporting the Government's commitment to reducing poverty and delivering an integrated strategy to address poverty and social exclusion.

Our assessment of budget 2017 is set out in section 2 of our presentation. We welcome the €5 increase in almost all social welfare payments, the partial restoration of the Christmas bonus and the partial reinstatement of the income disregard for lone parents. We also welcome the increased funding for the housing assistance payment and for emergency accommodation for homeless people. Although the increased budget for social housing is extremely important, we suggest it could be increased further in light of the level of demand in this area.

What was also very important in this budget was the introduction of the first stages of a new single affordable child care scheme. Finally, I highlight the increase in funding for higher and further education.

We regret, however, that some areas could have been better addressed and were not. People under 26 years of age continue to be on lower social welfare payments and the budget effectively increases the gap between this group and their older counterparts. There is no increase in support for asylum seekers in direct provision and the minimum wage is only increased by 10 cent per hour, which is very limited . Budgetary measures also do not appear to be part of an overall plan to address poverty, but rather involve spreading resources very thinly. We are also concerned about the cuts to taxation, particularly through the universal social charge, USC. By international comparisons, Ireland already has a low tax base and a large infrastructure deficit. The cuts to USC also benefited those on higher incomes most and could have been better spent on services such as child care, housing and reducing the cost of living for those on the lowest incomes.

I will comment briefly on the distributional impact. The Economic and Social Research Institute, ESRI, assessment of budget 2017 is that it is close to distributionally neutral overall but with some minor additional resources targeted towards those on the lowest incomes. I have included the ESRI chart in my submission which shows some of that.

In section 3 of the submission we look at benchmarking social welfare rates, which we believe is important for an integrated social inclusion strategy to address issues such as income, services and access to decent work. We propose that all adult social welfare rates be benchmarked to a level that lifts people above the 60% poverty line, while also being adequate to provide them with a minimum essential standard of living. This could be achieved over a number of budgets. The most recent survey on income and living conditions, SILC, for 2014 shows the 60% poverty line for an individual at €209.39 per week. Following the changes in budget 2017, the social welfare rate for most adults will be €193 per week. This leaves a gap of over €16 per week to be covered in terms of people having an income at the poverty line. The table in the submission shows the gap between the social welfare rates that will be in place in 2017 and the poverty line. It is a particularly big gap for those under 26 years of age.

I will move on to the minimum essential standard of living. This is based on a widely accepted methodology which calculates the income necessary for different family types to live with dignity. The work has been done by the Vincentian Partnership for Social Justice and its minimum essential budgeting standards research centre analysis of budget 2017 shows that of the 207 household types it has calculated with children on social welfare, the number of those families capable of meeting a minimum essential standard of living will marginally increase from 23 to 27 households as a result of changes in the budget. In addition, a single adult over 25 years of age will still have an income inadequacy of almost €60 per week. The gap between what they will have after the impact of budget 2017 and what they require for a minimum essential standard of living will be €60 per week.

Finally, there is the issue of poverty impact assessment. This is an important matter. Poverty proofing and, subsequently, poverty impact assessment have been part of Ireland's anti-poverty strategy since 1997. The definition of poverty proofing adopted in 1999 is:

[T]he process by which Government Departments, local authorities and State agencies assess policies and programmes at design, implementation and review stages in relation to the likely impact that they will have or have had on poverty and on inequalities which are likely to lead to poverty, with a view to poverty reduction.

It is important to highlight that the focus is not just on budgetary or spending policy but on all policy and programmes which could impact on poverty and inequalities. It also looks at the impact on different groups and is not limited to purely statistical analysis but allows for much more flexible approaches to assess the possible impact.

In 2008, new guidelines were adopted for what was then called "poverty impact assessment". These guidelines emphasised the importance of consultation and transparency as key parts of the process. The process involves seven steps. These are outlined in the submission, so I will not detail them now due to the time available. Overall, the assessments, since the period of their introduction, indicate that even from the start, while there might have been a reasonable level of formal compliance and reporting with poverty proofing and poverty impact assessment, it is much more difficult to identify what the actual impact was on policy and programmes, and therefore the impact on poverty. Since 2008, the social inclusion division in the Department of Social Protection has continued to work on poverty impact assessment but with ever-decreasing resources and focus. In effect, throughout this time poverty impact assessment was only carried out in very limited circumstances and with little transparency in the process.

I will outline our recommendations for a poverty and equality impact assessment. It must be comprehensive and include all relevant policy areas. It must be a planning tool and not just a reporting process. It must be transparent and be published in a transparent manner, involving a clear assessment and justification for decisions in poverty terms and how they impacted on policy. The assessment must involve meaningful consultation with those impacted by the policy measures. It must be part of policy debate, including debate in the Oireachtas, and involve assessment using a range of indicators, not just the numbers at risk of poverty, and examine the impact on people's lives. Also with regard to poverty impact assessment and poverty proofing, there must be a commitment to, and ownership of, impact assessment at the top level of Government as a tool for supporting it to deliver on its commitments to reducing poverty and inequality. The Department of the Taoiseach should take a lead role in rolling it out across all Departments.

In conclusion, the effective impact assessment of the budget is essential in addressing poverty and inequality. The committee has a key role in ensuring that this happens in a transparent manner. This should not just involve looking at the specific tax and expenditure changes in any one budget but at overall taxation and expenditure. It is also crucial that the Government seeks to strengthen the implementation of impact assessment across all policy and programme areas as envisaged in poverty impact assessment guidelines.

David Cullinane (Waterford, Sinn Fein)
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I thank the witness for the presentation. I agree with much of what was said and with many of the priorities identified. However, we are all operating under the constraint of the so-called fiscal rules. They have been revised downward in recent times by the Government following Brexit and external shocks. The fiscal space sets out what additional spending is available. Then there are discretionary measures that can be introduced through taxation increases, public spending savings and so forth. Obviously, therefore, we must be conscious of the fiscal space and work within those parameters, regardless of whether we like them. Is the network involved in any of the debate that is taking place at European level, or even national level, about flexibility in the rules? Whatever about borrowing money for daily spending, and I have a view on that, there would certainly be an argument that we should be able to borrow to invest more in capital and public infrastructure and that the fiscal rules are too rigid in this regard. Has the network given any consideration to that matter or carried out any work in respect of it?

The document the witness presented to the committee is probably the network's pre-budget submission. It refers to greater taxation on wealth and to increasing employer PRSI closer to average EU levels.

What specifically is Mr. Ginnell referring to in the context of taxation on wealth? On the issue of increasing employer PRSI, has he given any thought to the European Union average levels? When the European Anti Poverty Network, EAPN, is making proposals, what exactly is it seeking? The point about poverty impact assessments is something we discussed earlier. Equality proofing and poverty proofing budgets is something the committee discussed when it was being established. We had a number of experts before us and they made very compelling arguments for it to be mainstreamed within the Departments of Finance and Public Expenditure and Reform. There is obviously a scrutiny role for Oireachtas committees but they need to be conscious of it. What type of work has the EAPN done on that and has it made any representations to the Departments in question on poverty impact assessments or poverty proofing?

The contentious issue of the USC was raised. There are different views politically on that but most of the organisations that have been in before us have not been in favour of abolishing it. What work has been done in that area? What is the EAPN's position on that?

My final point is on the living wage. I was involved in authoring a report on the issue of low pay for the jobs committee just prior to the general election. That report focused on wages but it also looked at the living wage as a concept. It made the argument that welfare transfers, access to public services, such as health and investment in child care, are as important - if not more important - than increasing wages because wages can go up or down. If there is a collapse in the public finances, wages can go down and people are reliant on them. Welfare transfers, public services, taxation and working conditions and work-related considerations such as precarious work, part-time work, contract work and low-hour contracts are also important. When looking at the living wage, has the EAPN considered other issues such as the cost of living being as important as the actual aim of a living wage? They are my opening questions.

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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Does Mr. Ginnell wish to address those questions?

Mr. Paul Ginnell:

I will take some of them. I thank the Deputy for his questions. On the fiscal space, we have not engaged as directly. We were part of the Better Europe Alliance and in that context we meet the Joint Committee on European Union Affairs and also engaged with the Department of the Taoiseach and other Departments.

Initially there was very little room for flexibility but it seems, as the Deputy said, that recently there has been an increase in recognition, which started with demands from larger countries, in particular France and Germany, that there be some more flexibility. The annual growth survey released by the Commission last week, which is their main document of the year, seems to say that on an ad hocor individual basis, at a European level, they would consider flexibility, particularly when it comes to investment and the recognition of the need for investment. At a European level, we focused on the investment side and the importance of investment on flexibility but did not directly lobby on it. It seems there has been increased recognition of the need for flexibility. All stakeholders at a national level have been demanding that for a number of years.

In terms of taxation, wealth, employer PRSI and our pre-budget submission, there has been work done by TASC on a wealth tax. In the past, the community platform has also made proposals on a wealth tax looking at all areas of wealth. It is one element. TASC estimates that a wealth tax would bring in around €500 million per annum which is not vast. It would make wealth more transparent and bring much more information into the system. It would have some Revenue benefits but it would also provide more transparency in wealth.

In comparative terms, Ireland has one of the lower levels of employer PRSI in the EU so we are asking to move more towards the EU average. As I said earlier, although it does not appear to be, Ireland is-----

David Cullinane (Waterford, Sinn Fein)
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What is our rate and what is the European Union average?

Mr. Paul Ginnell:

Employer PRSI is-----

Ms Bríd O'Brien:

The Irish rate is 10.75%

David Cullinane (Waterford, Sinn Fein)
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What is the European average?

Ms Bríd O'Brien:

In some European countries it is considerably higher but in others it is not. In countries where it tends to be higher, it is often used towards the expenditure on what we term social issues.

Mr. Paul Ginnell:

Ireland has a low tax base compared to other EU countries and employer PRSI is one of those areas where we are behind. We are not behind so much on income tax but on employer PRSI there is quite a considerable gap. We do not have a specific demand but definitely suggest moving higher and towards the EU average. There is resistance to that from certain quarters. That is one of the main areas where there could be some catch-up compared to other European countries.

Poverty and equality proofing is something we have been highlighting consistently for a number of years with all Departments. The EAPN has done it bilaterally but also, as part of the community and voluntary pillar, we meet regularly with the Departments of Finance and Public Expenditure and Reform. It is consistently on the agenda. It is consistently something they say they are working on but we have yet to see what exactly they are doing on it. We keep hearing there is something in the offing and there is supposed to be an event next year. Initially they were saying that they would hold an event early next year on this but we do not know the detail of what is being proposed.

On the USC, the issue is being raised in terms of the erosion of the tax base. From our point of view, it is important to maintain a steady tax base because of the demand for services and investment. While it can be argued that taking people on lower pay out of the tax net is important to their pay, we consider increasing pay by giving a living wage is another way of ensuring people have a decent income. The Deputy mentioned his report, which I was at the launch of and have read. It is a comprehensive report and it shows the holistic approach that needed to be taken to taxation, pay and access to services. In terms of a minimum essential standard of living, which is the basis on which a living wage is calculated, one must look at the cost of services. If the cost of a service is reduced, for example, by a child care subsidy, which, in turn, reduces the cost of living, it makes it easier for people and all of this balances out. The cost of housing is another obvious matter in respect of which this would apply. All of these things interplay with each other. There is a need for a holistic approach to how these issues are addressed. That is what we said on an integrated anti-poverty strategy. It is not about one issue but how these work in the round, which is why we say the committee has a role in ensuring that the issues are worked in the round.

Kate O'Connell (Dublin Bay South, Fine Gael)
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I thank Mr. Ginnell. I am sorry I had to pop out for a second. Regarding the USC, Mr. Ginnell mentioned the steady tax base. Has the EAPN done any work on something that came up at this committee - which both of us have spoken about - to the effect that instead of being abolished, the USC would be channelled into PRSI? Has the EAPN considered that as a way of keeping the base broad but of using the money specifically towards the PRSI pot?

Has the EAPN done any work on the impact of the living wage on employment figures? I employ 30 people, give or take, in my other profession. Many of them are shop assistants and low-wage earners. I am only looking at it from my narrow point of view but if one was to increase the wage to €11.50, has the EAPN done any work on whether it would lead to lay-offs from those sort of jobs, the impact of it or the inflationary impact of an increase of the minimum wage to the proposed living wage?

Mr. Paul Ginnell:

I will take that question. We have not done specific work on the living wage. There is a living wage technical group, which the Deputy is probably aware of, that does a lot of work on that. What was the first part of the question?

Kate O'Connell (Dublin Bay South, Fine Gael)
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It was about the USC and the PRSI.

Mr. Paul Ginnell:

In the past under the community platform we had a broad alliance of organisations. We would have recommended moving the universal social charge to a social insurance type payment because its structure in the way it operates is more like a social insurance payment and it started from that base. That was part of a recommendation back then. The universal social charge has a more progressive structure. It can be organised in a progressive way as a form of taxation or a social insurance payment. In the past we would have recommended that it would be moved over and become part of the social insurance element. That element in that past was very much reduced during the crisis. The Social Insurance Fund was almost emptied. It is not a direct income tax but it could also form part of the social insurance base.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Mr. Ginnell is of the view that it is a good idea to replenish the pot that was depleted. Is is correct to infer that?

Mr. Paul Ginnell:

We do not have a position on it. In the past as part of the community platform, which was a broader alliance of organisations, that would have been our recommendation. That would have been a number of years ago.

Ms Bríd O'Brien:

It is probably an issue to be explored further, together with whether the role of the Social Insurance Fund should be broader. It is currently quite specific and narrow. The issue of whether that should be broadened is one to be teased out. It is one block of tax or contribution paid by the citizen where he or she can see where the money goes. From that point of view, it can play that role. However, it would need to be teased out further if that was a route we were to go down. That would require further exploration and discussion.

We would regard the living wage as an important concept because many of us have concerns about the fact that the terms and conditions of work for many people are not as good as they once were. There is the impact that has on people trying to move from welfare into work or people who are working who are trying to cope with the cost of living or even the cost of going to work and being able to participate in society. Therefore, it is an important concept.

Deputy Cullinane raised the issue of the relationship between welfare and work and, ultimately, who needs to contribute to the take-home pay that the worker gets and how can that be done as fairly as possible. For many of us the concept of decent work and people earning a decent wage is critical. People need to feel that they will be protected in their work and that they will have security in terms of the hours they work. People need to know what their income is likely to be from week to week. There can be some flexibility around the second or the third wage coming into a family. That might suit people and they might be able to manage on that basis. However, if flexibility surrounds the primary wage, it is very difficult for people to manage because often they do not know, from week to week, where they stand. Given that much of Ireland's social policy is very much based on individuals being able to provide for themselves and their families, we need to have better services. Countries where there is greater equality generally have better services. We need to explore those issues further and address them in a way that gives people a sense that this is very much their country and that they can manage well with what is on offer. There are still a number of issues to be teased out. Some of those are around the vision we want for this country and how we want to it develop and emerge, particularly coming out of the recession to ensure that the recovery is experienced by everybody.

Kate O'Connell (Dublin Bay South, Fine Gael)
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As it happens, I mostly have ladies working for me on a regular 35-hour week or a 40-hour week. I also have a number of students and part-time workers. The issue is not that I cannot guarantee them hours, it is that they do not want them. They want to be off three weeks before and three weeks after their examinations. Essentially, they are on zero-hour contracts because they want them that way. That works for me in my small world. The witnesses might not know the answer to this question but they might direct me to whosoever might know it. How can we protect those types of workers who need to work to fund their education and need a greater degree of flexibility around hours than the primary or secondary wage earner in the family? How do we strike a balance whereby we can have zero-hour contracts for students but can ensure they are not taken advantage of and that we can also protect people who depend on their wages being paid every week into their accounts to pay their bills? Have the witnesses suggestions as to how we would deal with that? That is a practical concern I have. It is not the case that I believe anyone should have a zero-hour contract but there are people who require such contracts for their education or for some other reason.

Ms Bríd O'Brien:

It is a matter of ensuring there are good contracts, that people are clear about their hours and expectations and that both parties, the employer and the employee, have clarity in that people know there they stand and that if flexibility is required on either side, there are clear mechanisms to address that. In that way people at least have a good sense of where they stand from week to week or month to month, depending on circumstances, and both parties have clarity and workers have certainty about their work and a sense of protection. Flexible work arrangements suit some people and that is their choice. It is important that people feel they have a choice but for other people, particularly those trying to make the welfare to work journey, because of the uncertainty of the work on offer, many of them have felt that they could not make that journey, particularly if they had any logistical issues to address, be it child care or transport. In particular in the case of transport, it is very hard for people to secure their own private transport if they do not know where they stand income wise. It is a question of ensuring there is good information, that people understand their rights and responsibilities, that there are clear contracts, and that people know what is in them, what is expected of them and what is expected by both parties.

Mr. Paul Ginnell:

Deputy O'Connell probably saw the report by the University of Limerick on "if and when" contracts.

Kate O'Connell (Dublin Bay South, Fine Gael)
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I think I saw it in here or I saw something about it somewhere else.

Mr. Paul Ginnell:

It was published last year. It involved getting a grip on the belief that there is much precarious work with many people working on zero-hour contracts in Ireland. The report was commissioned by the Department. The University of Limerick examined whether the reality is that there are many zero-hour contracts here. It concluded that there is not a massive issue with zero-hour contracts but with low-hour and "if and when" contracts. In the report it analysed where this exists across a range of sectors. It is more in play where there are different opportunities for people. The report made a number of recommendations, one of the key ones being the need to give employees more certainty. Many of the issues seem to be that employees did not know until a few days or very close to the working week what their hours would be. There were a number of recommendations for legislation and tightening regulations around "if and when" contracts, which required people to be available if and when work was available. The recommendations sought to regulate and tighten up this area. That was the key issue for workers in Ireland, as opposed to necessarily zero-hour contracts where people had no guarantee of any hours.

Kate O'Connell (Dublin Bay South, Fine Gael)
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The issue for people was that they would have certainty about their hours.

Mr. Paul Ginnell:

That was the biggest issue for people. There also were recommendations around the level of income. People should be assured of a certain level of income. Even if people were not be required to work the number of hours they were available, they would still have to be guaranteed a certain basic income or a number of hours. That report, which contains a number of recommendations, is useful.

Kate O'Connell (Dublin Bay South, Fine Gael)
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I believe it was Mr. Ginnell who spoke about employer's PRSI being low relative to other European countries. The tax credit for the self-employed was increased in the budget by €500 to €950. I think the figure is €1,650 for employees. How does Ireland compare relative to other European countries on that?

Mr. Paul Ginnell:

I am not sure.

Ms Bríd O'Brien:

We previously looked at the issue of self-employed people being able to access social insurance-based payments, particularly with respect to jobseeker's benefit.

What is quite striking is that in a country like France, the contribution that a self-employed person made into the pot was considerably higher than it would have been here. In other countries, that would have been different. We were quite struck by the contribution that self-employed people in France made. Therefore, if things did not work out for them, they had access to greater social protections than people would have here. One of the recommendations we would have made at that stage is that somebody who is self-employed should be facilitated in making a contribution on behalf of themselves, effectively as an employee and employer.

Kate O'Connell (Dublin Bay South, Fine Gael)
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Yes.

Ms Bríd O'Brien:

At least people could build up that level of protection if things did not work out and they would be assured of access to jobseeker's benefit, for example. We are conscious that quite a number of people who ended up in difficulties during the recession because of their unfortunate circumstances were able to access jobseeker's allowance because they met the means-test criteria. It is around how to build that safety net for people. In that regard, some changes have been introduced that will allow greater access to some of the social insurance supports. If everything goes belly-up for people, the only payment they can access now is jobseeker's allowance. We were struck by how there seemed to be a greater contribution to the pot in other countries in order to cover the issue.

Lisa Chambers (Mayo, Fianna Fail)
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I thank the witnesses for the presentation and for the detailed document they provided. Deputy O'Connell touched on the fact that, by international comparisons, Ireland has a low taxation base. What do the witnesses propose? I know they have touched on the USC but am I to take it that they are not in favour of any reduction coming through in the budget? The witnesses spoke about a wealth tax and increasing employers' PRSI but what measures are being proposed that we should consider and potentially implement, specifically with regard to revenue-raising measures?

Mr. Paul Ginnell:

The Deputy mentioned some of them. It is an area to be examined as there is a broad assumption we pay high taxation in the Ireland. At a European level, however, we pay 30% tax to GDP whereas the average is 40%. We are 10% behind the European average.

Lisa Chambers (Mayo, Fianna Fail)
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Is Mr. Ginnell advocating narrowing the tax bands or increasing the tax rate? What is he advocating?

Mr. Paul Ginnell:

We are looking at a number of elements, including a wealth tax. Another small area would be a financial transaction tax that has been recommended and which a number of European Union countries are considering. The key is not to reduce the tax base we have for now. Considering the deficit we have in our social infrastructure, reducing the current tax base would be a mistake. A wealth tax, a change to employers' PRSI and a financial transaction tax are some ideas.

Lisa Chambers (Mayo, Fianna Fail)
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How would the wealth tax work? Who would pay it and at what level would it kick in? What would be the tax? In that context, have the witnesses considered the impact of that tax in terms of individuals moving money and other assets out of the jurisdiction to avoid paying the tax altogether?

Mr. Paul Ginnell:

We have not done detailed work on it but I have highlighted the report from the Think-tank for Action on Social Change, TASC.

Lisa Chambers (Mayo, Fianna Fail)
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Yes.

Mr. Paul Ginnell:

It has examined the issue in great detail, including international examples of where a wealth tax currently exists. It suggests it would not been on lower levels of wealth but on assets of over €1 million, excluding certain types of assets such as the family home and so on. It would be kept at a low level, such as 0.5% of unearned wealth or income. Considering international examples, it was felt that it would not create a flight of wealth if the tax was kept at a certain level. It would be a self-declared tax. Over time, it would built up a certain amount of knowledge about wealth in Ireland, enabling us to make better policy in terms of how to address this into the future. Initially, it suggested a reasonably low level of tax on unearned wealth and a certain high threshold at which it would come into play. It would, over time, produce a level of information that could be used for future progression.

Initially, it would not bring a massive amount of revenue - it would be approximately €500 million - as it is very hard to estimate the amount of wealth that exists. The Central Statistics Office did some work on this last year based on older data. There is very little information on this type of wealth. Over time, one would build up a level of knowledge by having this system in place and this would allow something more comprehensive to be introduced in future. It is a way of building a level of knowledge and another area to look at with regard to wealth. A few years ago, the Government introduced the application of PRSI to unearned income, and that has begun to bring a little bit of focus on taxation or PRSI on forms of wealth apart from income.

Lisa Chambers (Mayo, Fianna Fail)
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The witnesses are advocating an increase in the employers' PRSI.

Mr. Paul Ginnell:

Yes, although we do not have a particular target. It is about moving it higher and towards the EU average.

Lisa Chambers (Mayo, Fianna Fail)
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I do not know the views of other Deputies but the feedback I get, particularly from smaller and family-run businesses, is that they struggle. The PRSI they pay is one of many costs in running a business. It is difficult to strike a comparison between this jurisdiction and other states because perhaps their VAT rates, rental or wage costs are lower. There is an overall context regarding the cost of running a business. The consistent feedback from businesses is they are barely able to cope with the level it is already at, and such a change would force them to let people go. It certainly would not encourage them to take on people. Our focus in recent years has been to create jobs and employment, as Mr. Ginnell is aware. When he advocates increasing PRSI, has he considered that it is one of a number of costs and that it cannot be compared directly with what applies in other states? One must consider whether the overall cost of running a business is very low. That is one aspect but I would be very concerned about advocating to increase that tax on business because of the potential impact on employment. There could be a loss of jobs as well as an obstacle to creating employment.

Mr. Paul Ginnell:

We would have a similar view in other areas. USC is a social insurance payment. It is something to be investigated. We have not looked at it in that holistic way but it is an issue to be examined. Ireland has a major deficit in social infrastructure, as highlighted by the European Commission. In that case it is about considering the possibilities to raise revenue. There is revenue required for social housing, our child care infrastructure and other areas, so how will that be-----

Lisa Chambers (Mayo, Fianna Fail)
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We certainly need money.

Mr. Paul Ginnell:

In order to get this, we must consider other opportunities.

Lisa Chambers (Mayo, Fianna Fail)
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Our biggest sources of revenue are income tax and corporation tax. If jobs and industry are affected, we will lose ground in those two areas. If we increase employer PRSI, we could very well lose the same amount gained or even more, ending up worse off by making such moves. We must be very considerate in any suggestion we make. Any suggestion of an increased tax on business can have the effect of discouraging people in investing in our country. We must be very careful about any suggestions that might damage our reputation internationally. I accept Mr. Ginnell's point about exploring the possibilities and this is one of many options. Revenue must be raised and services must be provided and we must consider how to do that without crippling people with taxes.

There is a table on the poverty line for 2014 outlining the different groups. It is quite shocking to see the gap in respect of people between the ages of 18 and 24. I am very much against the idea that those under 26 receive less social welfare than others because someone in that age bracket who is working full-time pays the same tax as everybody else. People should, therefore, be entitled to the same social protection as everybody else and there should not be a distinction. I understand the thinking behind this because it was designed to encourage people to get back to work. People in that age group will argue that they cannot obtain work or that they find it extremely difficult to do so. It is not for the lack of them wanting jobs. Is the suggestion simply to increase the social welfare rate? Is there anything else we can do to assist the people in the age bracket to which I refer who are in their early 20s. It is very difficult for them now, particularly in the context of owning a car or a home while having a decent standard of living. As a result of attending college, university, an institute of technology or even learning a trade, these individuals may have massive debts.

What are their prospects of being financially secure? I am sure there are many people of that age group who are thinking they will never have that feeling of being financially secure. Aside from the inequality we need to address in the social welfare system, is there anything else we could do for people in that age group?

Ms Bríd O'Brien:

We need to address the age segregation that was introduced in the social welfare system. It was introduced initially for those aged 18 years and 19 years to encourage them to stay on in the education system.

Lisa Chambers (Mayo, Fianna Fail)
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Yes.

Ms Bríd O'Brien:

At that time, with children starting school at five years and then doing the transition year, people could still be at school at 18 years and 19 years. That was the original thinking. As the crisis deepened and other considerations entered the mix, the age limit was raised further. I think it has sent a very negative message to young people.

What is interesting is that when one looks at the emigration figures, it will be seen that twice as many people who had a job emigrated. The quality of a job is a critical issue, particularly for young people. Many young people felt that some of the work that was on offer would not allow them to enjoy either the type of career they had hoped for-----

Lisa Chambers (Mayo, Fianna Fail)
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The lifestyle they would like.

Ms Bríd O'Brien:

-----or to be able to afford what older generations had taken as standard expectations. I think that is an issue we need to address as a society. We then have to tease out how we address the cost of living and the services gaps. One issue in particular that is coming up quite a bit is the cost of housing. Not only is the cost of housing a social issue, it is also an economic issue. I would be conscious that some employers are finding it difficult to fill some jobs because people, such as Irish emigrants who might be contemplating coming home or other workers who have the skill sets we are looking for, are looking at the cost of housing and saying "crikey".

Lisa Chambers (Mayo, Fianna Fail)
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They are thinking it is not worth their while.

Ms Bríd O'Brien:

There are issues we need to address in terms of the cost of living. It is about creating that sense for young people that they can have a future here that is secure.

Lisa Chambers (Mayo, Fianna Fail)
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I agree with Ms O'Brien. I would like to see further discussion on the social welfare inequality, as it were, for younger people. Let us call a spade a spade, the measures were brought in because we were broke, we needed to save money and this segment of the population was the group that was least likely to vote and affect Government. That is being very blunt. As the country recovers and as there is more money in circulation, we should be looking to address this inequality. It sends a very negative message to younger people that they are worth less and that Government can get away with it and there is nothing they can do about it. It is also reflective of the fact we do not have many younger people in politics and perhaps their views are not being advocated strongly enough. That is a job for us as well. I thank Ms O'Brien.

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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I think the problem is that the younger people get old.

Lisa Chambers (Mayo, Fianna Fail)
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I was not looking around the room. Three of the youngest Deputies in the Dáil are here at this committee meeting.

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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That was me once. I have a number of follow-on questions. Before the budget, a number of witnesses who appeared at the committee made a point on PRSI. Their view was that PRSI, whether it was the employee or employer contribution, was below the European average. Is that borne out by any examination that the European Anti-poverty Network has done? Do the witnesses agree with that viewpoint?

Ms Bríd O'Brien:

Our income tax rates are quite similar to other countries and people enter the higher rates at a lower income than they do in other countries. In regard to the social insurance contribution, certainly the employer's contribution is lower and, likewise, for some employees the rate is lower.

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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I am trying to recall evidence we heard two months ago, but a number of the witnesses who were not coming from a right of centre viewpoint were at pains to point out that our taxation and welfare system was among the most redistributive that exists in the European Union. Again, is that something the witnesses would have found out from conducting investigations or would they have a different view on that point?

Mr. Paul Ginnell:

If one looks at EU Survey on Income and Living Conditions, SILC, an annual survey conducted by the Central Statistics Office, CSO, it has income and poverty statistics. It shows that Ireland is among the most redistributive systems in the EU. Unfortunately, because income from the market leaves us among the more unequal, even after transfers we still only hit around or below the average. It does not move us. It would be the best system at the end of the day. It has to work harder in Ireland. The transfers have to work harder in Ireland to bring us to the EU average. In most social reports that Ireland sends to EU, the comments from the Commission is that we are one of the most redistributive, but from a very unequal base market-wise.

Mr. Robin Hanan:

I might add to that comment. When the CSO figures look specifically at tax and welfare and the impact of welfare transfers on reducing the poverty rate, Ireland has gone from being one of the countries which has the least redistributive, where welfare does least to reduce poverty rates, to one of the countries where welfare does most. When we talk about the impact of being a low tax country, we are also taking into account the other part of the triangle, which is the services which are available and which have most impact on the lives of our members, the people living on very low income. While we have got to a situation where welfare transfers are helping us avoid the really extreme level of poverty, which would be very much an outlier in Europe, if this compensation was not in place, the low tax base has an enormous impact on the quality of our public services, which increases the real impact of poverty right across the board.

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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I wish to address a question to Mr. Ginnell on the graph on page 2, entitled Poverty Trends 2008 to 2014. Mr. Ginnell states that we are not in a good place. I suppose that is reflective of where we were in 2008. When are we likely to see an updated version, in other words, figures for after 2014? In one sense 2014 is not that long ago, but in another sense it is almost three years ago now. Mr. Ginnell has marked three indicators on the graph, at risk of poverty, material deprivation and consistent poverty. Does he know if the statistics are moving in a downward direction since 2014 or has he evidence of which way they are moving?

Mr. Paul Ginnell:

This data are old. They are from the Survey of Income and Living Conditions, which I mentioned earlier in terms of redistribution of income. The CSO produces these data and it has been trying to update them and have them in a timely manner. That has been an issue in recent years. We expected it this month, but the latest information from the CSO is that it will be sometime before the end of the year, it hopes. There is some glitch in the statistics which it found in the USC.

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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Will that bring us up to 2015?

Mr. Paul Ginnell:

Yes, it will bring us up to 2015, so we will still be a year behind. It is slightly complex but in terms of looking at Ireland's income data, it is a business survey so it also surveys people. It literally interviews people as part of the survey. A lot of the information is based on the data from the Department of Social Protection and the Revenue Commissioners in terms of looking at Ireland's income levels. The CSO has to get all the data first and it then puts the survey interviews through the system as well. It tries to get it as early in the year as it can. October and November is the earliest time it can have it. The 2015 data should be available soon, I hope. They will be delayed.

In terms of my sense of direction, what we see in the graph will be continued. The first item is material deprivation which comprises 11 basic items that people need to have. If people are lacking two of the 11 basic items, such as a certain amount of food, clothing, footwear, certain social life and so on, they are suffering material deprivation. That will fall as incomes have risen more generally. I think many people who were experiencing material deprivation, and it was more than 30% of the population, are now in work. As incomes begin to rise across the board, including from social transfers but also from work, I would expect that to continue to fall.

The second heading is "at risk of poverty", and that blue line is the poverty line. As incomes rise, the threshold which is currently €209 per week is likely to increase.

It is possible that the number of people falling below the line will increase as well. That is unknown but it is possible that there will be an increase.

The consistent poverty line is next. This is what the Government has targeted for reduction. It is based on people who have experienced both types of poverty. People who suffer from material deprivation and who are below the poverty line are deemed to be in consistent poverty. That is an unknown factor. It is a question of who experiences both types. The figures are based on the survey. It is difficult to know. The numbers could fall further. They are likely to fall somewhat because the at-risk-of-poverty line is likely to increase while material deprivation is falling. The cross-over of the two variables is unknown but I expect that it would fall somewhat.

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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My final set of questions relates to unemployment. Figures published today suggest that the unemployment rate is down to 7.5% from a peak of 15.4%, although I stand open to correction on that. It is an old chestnut. The view is that the best way to reduce poverty is to get people back to work. What has the impact of the past four years been since unemployment started to drop from its highest point? What has the impact been in terms of getting people out of poverty?

I represent a large rural constituency, parts of which are sparsely populated. However, it has a number of substantial towns as well. The worst poverty I have come across is in isolated rural areas. I am conscious that even in isolated rural areas there may be generations of families who have not worked. How does Ireland compare with other European countries? This is tied in to the American idea of the rust belt and the loss of manufacturing.

The biggest urban centre in my region is Waterford city. Other urban centres nearby include Wexford and Carlow. They have suffered significant losses in manufacturing employment in the past ten years or more. Even at the height of the Celtic tiger, many of those manufacturing jobs were going. Do we have significant concentrations of unemployment in geographic locations throughout the country? Is there an intergenerational unemployment issue? Is the issue as great as I and others fear? I might think of some other questions before our guests conclude, but perhaps they could try to address some of those I have already raised.

Ms Bríd O'Brien:

It is welcome to see the headline figures all moving in the right direction. However, that is of cold comfort to anyone living in the circumstances the Chairman described. Likewise, let us consider a region like Dublin. The employment and unemployment figures look healthy. Again, that is of cold comfort to anyone living in some of the less-well-off suburbs in Dublin where there is often intergenerational unemployment and associated poverty.

Let us consider the EU statistics on income and living conditions, EU-SILC. One of the groups that jump out is made up of those who are unemployed and experiencing poverty. Certainly, getting a decent job can make a big difference to people. This means that if a person needs to get a loan or car insurance, her opportunities are better if he or she has a job. Some firms will not even give people who are unemployed insurance quotes. Life circumstances can certainly be improved if a person gets a job, but it depends on the nature of the job. The feedback we get from individual members and affiliates working and living in rural areas is that often trying to get access to such decent jobs can be problematic. Transport can be a major issue too when it comes to trying to access whatever work is available in an area. That has come to our attention as an issue. We have raised it previously because we take the view that it is particularly difficult to resolve.

Unemployment in the south east is often higher than the national figure.

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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It was higher at the height of the boom as well. We were way off kilter.

Ms Bríd O'Brien:

Wexford Local Development was one of the original partnerships. It is a part of the country where attempts to obtain - and then maintain and develop - sustainable employment has represented an ongoing challenge. Developments such as Brexit and the election of Trump in the USA will throw up unforeseen issues in terms of what will happen to foreign direct investment here and in other countries. All these factors add layers of complication.

It is important that the regional action plans for jobs and the targets in the programme for Government are delivered and that we examine ways to develop sustainable indigenous enterprises and self-employment options for people. We get feedback from unemployed people, including those who are older, and from others within communities. Sometimes they are in circumstances whereby they believe that unless they generate their own job, they will not get one. It is a question of trying to ensure that people going down that route get the necessary supports to be able to deliver on it.

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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There is a vote in the Dáil and we have been called. I apologise for walking out. I could have followed up some more. That was very interesting. I apologise on behalf of members. Many of our members are tied up with the Finance Bill in the Dáil. In any event, I thank our guests sincerely for attending. We will have them back, I am sure, at some stage as we get up-and-running properly in advance of budget 2018.

Mr. Robin Hanan:

I thank the committee. I will offer one quick parting shot. We discussed poverty-proofing as a technical exercise. It is an exercise that generates information. We are hoping that politicians and journalists will use that information to generate the public debate, which, in turn, will lead to the questions to deal with poverty.

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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We will endeavour to do that.