Written answers

Wednesday, 29 October 2008

Department of Social and Family Affairs

Anti-Poverty Strategy

9:00 pm

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 370: To ask the Minister for Social and Family Affairs her views on the OECD's recently published report entitled Growing Unequal Income Distribution and Poverty in OECD countries; her further views on its findings with respect to income poverty and persistent poverty trends in Ireland [i]vis-À-vis[/i] other OECD countries; and if she will make a statement on the matter. [37286/08]

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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The recently published OECD report 'Growing Unequal? Income Distribution and Poverty in OECD Countries' examines whether income inequality has increased over time in the 30 developed countries of the OECD. The report concludes that the gap between rich and poor has grown in more than three-quarters of OECD countries over the past two decades. Although income inequality in Ireland, as measured by the Gini Coefficient, is slightly above the OECD average, there was a decline in this measure during the period under review. This decrease contrasts with the dominant pattern across the OECD, which was one of a fairly widespread increase in inequality in two-thirds of all OECD countries.

Relative income or the 'at risk of poverty' indicators are also examined in the report. These are relatively high for Ireland due to a number of factors. The indicator is based on incomes generally and these improved substantially since the early 1990s. This was due, in particular, to the major increases in the labour force, in employment, in the proportion of more highly paid jobs, and in female participation in the workforce, leading to considerably more two income households. These developments are reflected in the increase in the 'at risk of poverty' income threshold, based on incomes generally, from €102.44 per week in 1997 to €202.49 in 2006 — an increase of 98 per cent (This threshold is set at 60 per cent of average median income by the EU).

The impact of the major increase in average incomes masked, for example, the substantial improvements for those on lower incomes. For example, over the period 1997 to 2006, basic social welfare payments increased by 99.7%, compared to price increases (Consumer Price Index) of 35.8 % and average industrial earnings of 61.8%.

The impact of both the high levels of employment and substantial increases in welfare payments can be seen in recent poverty trends. The percentage 'at risk of poverty' reduced from 19.7% in 2003 to 17% in 2006. The decline is most marked among the elderly for whom the percentage at risk of poverty more than halved from 29.8% in 2003 to 13.6% in 2006. One outcome of these developments is that Ireland's comparative position with other EU Member States has reduced from the third highest 'at risk of poverty' rate in 2005 to tenth highest in 2006.

The overall poverty goal in the National Action Plan for Social Inclusion 2007 to 2016 (NAPinclusion) is to reduce basic deprivation or 'consistent poverty' to between 2% and 4% by 2012, with the aim of eliminating it by 2016. Since 2003 the percentage experiencing consistent poverty has reduced from 8.8% in 2003 to 6.9% in 2006 — an almost 2 percentage points reduction, which is on target to meet the overall goal of the strategy. The comprehensive strategy set out in the NAP inclusion and in the Chapter on social inclusion in the National Development Plan is designed to reduce poverty and inequality in the period up to 2016.

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