Joan Burton (Dublin West, Labour) | Oireachtas source

Taking the measure of income inequality used internationally by economists such as Paul Krugman and Joseph Stiglitz, the Gini coefficient, Ireland does extremely well. Ireland has a level of inequality that is below the average in the European Union and the 28 OECD countries, as well as the United States and the United Kingdom. In other words, we have less inequality in Ireland, notwithstanding the biggest economic crash in our history, than the average of European Union and OECD countries. It is far below that of the United States. According to EUROSTAT, the Gini coefficient was 30 in Ireland in 2013, compared with a European average of 30.5. This is a reflection of both our highly progressive tax system and the strength and depth of Ireland’s social protection system.

Relative poverty is measured through the at-risk-of-poverty indicator. EUROSTAT data indicates that Ireland’s at-risk-of-poverty rate in 2013, the last figures we have from the survey on income and living conditions, SILC, and which was based on data from the height of the crisis in 2012, was 14.1%,. That is better than the EU average, where the proportion at risk of poverty is 16.6%. Ireland has the seventh lowest at-risk-of-poverty rate of the 28 EU member states. A key reason for Ireland’s low at-risk-of-poverty rate is social transfers. In 2013, social transfers, excluding pensions, lifted almost a quarter of the population out of relative income poverty. Ireland is the best-performing EU member state in reducing poverty through social transfers, and this reflects the Government decision not to reduce core welfare rates as part of the troika programme.

Looking forward, I believe that growing employment and supporting people back to work will have the greatest impact on poverty. The Government’s twin employment strategies of the Action Plan for Jobs and Pathways to Work are reaping rewards as Ireland’s recovery continues to strengthen, with more than 110,000 additional people returning to work and unemployment falling by a third. We have much to do in this area but we are just behind the likes of Austria, Sweden and Denmark. That we have the seventh lowest level of inequality in the EU is a very important achievement.

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