Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
Link to this: Individually | In context | Oireachtas source

17. To ask the Minister for Finance if he acknowledges, following the recent publication of The Sunday Times rich list, The TASC report, Cherishing All Equally: Economic Inequality in Ireland, and the Credit Suisse report on Global Wealth, that there is overwhelming evidence of a dramatic concentration and increase in the wealth of the very richest in Irish society; his views on whether a widening gap between rich and poor needs to be remedied with higher taxes on wealth, profits and very high incomes, not simply as a matter of fairness but also because such disparities of wealth represent a serious macroeconomic threat to the economy; and if he will make a statement on the matter. [17567/15]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am aware of the various reports and analyses referred to by the Deputy in his question. 

The TASC report found that market income inequality (i.e. income before taxes and transfers) is relatively high in Ireland and has increased since the recession. However, more importantly, recent data and research from the Central Statistics Office (CSO) and the Economic and Social Research Institute (ESRI) respectively, indicate that disposable income inequality over the period 2004-2013 has remained broadly stable. These patterns reflect the efficacy of the Irish tax and social welfare system in reducing market income inequality and the Organisation for Economic Cooperation and Development (OECD) has shown the Irish system to be one of the most effective of all OECD countries in this respect. 

The fact that this Government has maintained such a progressive and redistributive tax and social welfare system during one of the most difficult fiscal consolidations in the history of the State demonstrates its commitment to equality and fairness. ESRI research shows that Budgets 2009-2015 had neither a progressive nor a regressive pattern and that losses due to budgetary policy were highest for those in the top ten percent of the income distribution followed by those in the bottom ten percent. 

With respect to wealth inequality, comprehensive data on household wealth in Ireland, including assets and liabilities, has been published for the first time by the CSO. Crucially, these data have been collected across the entire eurozone according to a standardised methodology. These data indicate that wealth inequality in Ireland for 2013, as measured by the Gini Coefficient, is lower than the eurozone average. The results also show that wealth is less concentrated at the top of the distribution here than the eurozone average. Central Bank analysis of these data also indicates that while wealth inequality has increased since 2011, it is actually lower than in 2006, the earliest period for which data are available.

I am aware that some recent economic research, including by the OECD, has indicated that there may be a negative relationship between inequality and growth. However, their analysis suggests that this negative relationship did not apply in the case of Ireland.  Given this, and the fact that Ireland's income and wealth inequality levels are around the EU and eurozone average, I do not consider Ireland's level of inequality to constitute a macroeconomic threat.