Prioritise people and community over unbridled profits

Ireland’s social contract is broken yet we have the resources and the capacity to deliver a new social contract. Now is the time for political will and ambition to deliver real and impactful change for all members of society.  While the economy in Ireland has experienced record growth since the pandemic, infrastructure and services in areas such as housing, healthcare and public transport are far below the levels and standards that could be achieved with Ireland’s level of resources.

A new approach

It is our great failure that we cannot seem to envisage a society and economy based on a system other than what is already in place.  This system is working against community in favour of profit.  There are alternative and better ways of managing and organising economic activity to deliver a new Social Contract, one that would deliver a better standard of living and wellbeing for everyone in society.

Benefitting society as a whole

Improving living standards is not an either/or decision. The resources are available and if invested wisely we can improve them for everyone in society.

• This requires ongoing targeted support for those most in need and improved public services and infrastructure for all.
• It means investing one-off windfall revenues in one-off infrastructure projects that will lead to improvements in housing, healthcare, public transport, and renewable energy.
• It means setting a minimum social floor below which no-one in society should fall. 
• It also means being realistic about the amount of ongoing resourcing that will be required to fund the level of public services and infrastructure that people expect into the future.

As a nation, we must be capable of adequately supporting the economic, social and infrastructural requirements necessary to support our society.  The resources are available to deliver a new Social Contract, one that can deliver a vibrant economy, thriving communities, affordable housing, access to healthcare when required, access to education for all, transparent and good governance, and sustainability.

Resources

In the period ahead, policy should focus on increasing Ireland’s tax-take in order to deliver the services and infrastructure that people expect and require.  As well as reforming our current taxation system to adapt to changes in the global tax landscape, policy must also examine how best to broaden our tax base to fund the social infrastructure that will support growing and ageing population.  At a minimum, Government should commit to increasing our total tax. 

Increasing the overall taxation revenue to meet this new target would represent a small overall increase in per capita taxation levels, one that is unlikely to have any significant negative impact on the economy. However, reaching that level would provide a lot more recurring revenue for the state to invest in public services and improved living standards for all.

Incomes

Ireland’s level of poverty is very concerning with the figures all going in the wrong direction. 671,183 people in Ireland are living in poverty (13.1 per cent of the population), of which 188,602 are children.  143,633 older people are living in poverty, an increase of over 55,000 since 2021.  133,565 people living in poverty are in employment – these are the ‘working poor’.  These figures point to the long-term economic and social impact of the cost of living crisis on households who were already struggling before these problems arrived.

Governments approach to date has been exactly the opposite of what is required.  The failure to benchmark social welfare rates suggests a lack of interest in repairing the broken Social Contract. Budget 2023 widened the rich/poor gap by €199. In effect the resources available were shared in a manner that favoured the better off over the poor.   A minimum social floor means maintaining adequate levels of social welfare.  This is vital to ensure that we do not see an increase in poverty and deprivation.  If those dependent on social welfare are not to fall behind the rest of society at times of economic growth, the benchmarking of welfare rates to 27.5 per cent of average wage rates is essential.

Governance

Irish people do not want to see a widening rich/poor gap.  Neither do they want to see the persistence of a deeply divided two-tier society.  The State, however, seems to be subverting these key community values in the interest of unbridled profit.    A new social contract is required to address the core challenges now facing society.  Real citizen engagement and a new social dialogue should be at the core of such a contract.

As Ireland moves into a post-Covid world, it needs to cure the virus of social injustice, inequality, marginalisation, and environmental destruction.  In its place it needs a new Social Contract and a new Social Dialogue to facilitate movement towards that Social Contract.

It is not possible to develop a sustainable thriving economy without simultaneously developing decent infrastructure and services, just taxation, good governance, and sustainability at every level of policy making.  Securing these developments should be the major priority of Government in the months and years ahead.   This can be supported by a new social dialogue, including all sectors, which is focussed on enhancing the capabilities in our economy and society.