Speech by An Tánaiste and Minister for Enterprise, Trade and Employment Mary Harney TD on Private Members Motion, Dail Eireann Tuesday 14th October 2003

Check Against Delivery

The motion before the House is wide-ranging.

It attacks the social and economic policies of the coalition government on a number of fronts and I intend to deal in turn with each of the issues raised.

I would like to begin, however, by addressing the area of community employment, a subject which figures prominently in the motion and which falls within the remit of my own department - Enterprise, Trade and Employment.

Community Employment - CE - was originally designed as a transitional labour-market programme. It was intended to provide work experience and training for the long-term unemployed with a view to their reintegration into open labour market employment.

An overall restructuring of the programme was approved by Government in 1999. Under that restructuring place numbers are being reduced on a phased basis in line with the falling level of long-term unemployment in the Irish economy.

Policies change when circumstances change. When the coalition took office back in 1997 there were over 90,000 people classified as long-term unemployed according to the CSO's Quarterly National Household Survey. Today, that figure is down to just 26,000. The problem which CE was set up to address is in fact being solved.

Notwithstanding the phased reductions the Government's commitment to supported employment is still substantial. In the current year the total allocation for the Community Employment and Jobs Initiative programmes amounts to more than €320m. This funding is supporting an average number of 25,000 places on the two programmes in 2003.

This represents a very significant degree of labour-market intervention by the Government, particularly in an economy which remains at, or close to, full employment despite the international downturn.

And this intervention must be seen in a context where there is still a very high level of inward migration into Ireland by workers from both inside and outside the European Union.

I recognize the very valuable and important role which Community Employment schemes play. I am well aware of the huge contribution which they make to communities up and down the country. And I recognize the great efforts put in by the people who participate in the various schemes.

I am very much aware of increasing concerns in communities about the impact which CE restructuring and the changed labour market will have on their ability to provide services. In this regard there is a need to ensure that communities get the best value from the reduced pool of CE now available.

The Government has taken action to protect and prioritise certain activities within the CE programme in order to minimise the effect of reductions on particular groups and services.

Drugs Task Force activity and childcare service provision are prioritised as are projects in disadvantaged areas under the RAPID initiative.

And CE places in the health sector - which includes personal assistant services - are being maintained to ensure continuity in the delivery of these services.

A review is currently in train and these will have an important bearing on the scale and type of CE activity which will operate in the future.

Based on the outcome of the review, decisions on the funding and structure of the programme going forward will shortly be taken by government in the context of the 2004 estimates process.

I am confident, however, that we will be in a position to fund a very substantial and comprehensive Community Employment programme next year.

The motion before the House asks us to commend Deputy Joe Higgins for what is described as his unswerving stand in the pursuit of equity in Irish society.

The sponsors of the motion should consider for a moment what they are asking the House to commend.

Deputy Higgins actively encouraged people in Fingal not to pay their refuse collection charges, charges which were approved by the democratically elected local council.

Deputy Higgins tried to prevent council workers from going about their legal duties. And he sought to prevent householders who had paid their charges from having their refuse collected.

When ordered by the High Court to desist from these activities Deputy Higgins defied the High Court.

I must say that I see little to commend in any of this. We are all legislators in this House. We are put here by the people to enact laws and expected by the people to abide by those laws.

Democracy is not an a-la-carte menu. You can't decide to pay the taxes and charges you like and to evade the ones you don't like.

Suppose Deputy Higgins takes a dislike to other public charges and levies.

What if he decides that people shouldn't pay their television license?

What if he decides that people shouldn't pay their gas bills? What if he decides that people shouldn't pay for their electricity?

If we were to go down this road we would be writing a recipe for anarchy. As elected politicians it behoves all of us to act responsibly and to be honest with people.

Public services have to be paid for. To pretend otherwise is nothing but political opportunism and grandstanding of the worst kind.

I have no doubt that Deputy Higgins has his own good reasons for taking the action which has landed him in his present predicament. This state, however, is governed by majority vote in a democratically elected parliament. It is not governed by the views of a single deputy.

Substitute `income tax' for `bin tax' in the current debate and I wonder how many deputies in the House would be cheerleading for Joe Higgins and his campaign.

It has taken us a long time in this country to promote a compliance culture when it comes to taxation. It is ironic surely that it is an organization which calls itself the Socialist Party which now seeks to undermine the very concept of civic responsibility at local level.

The whole refuse charges campaign has for a long time sought political cover as some form of tax-reform movement - `no double taxation' has been the slogan. I believe this is entirely spurious.

The Irish tax system has been reformed. The PAYE sector has enjoyed very significant tax relief over the last six budgets. In fact, the statistics show that, after the last budget, some 680,000 earners are entirely exempt from income tax. That's 36% of all the people on the tax file.

And this brings me to the charges in the motion regarding fairness and equity and the impact of government policies on the lower paid.

There is a notion out there that the coalition government took power back in 1997 with the intention of robbing the poor in order to give to the rich. In this simple world of cartoon-strip politics there are good guys and bad guys.

The good guys - and they are all on the left - are the only ones who care about the lower paid and the less well-off. The bad guys - and they are all on the government side - don't care at all about the lower paid and devote all their energies to helping the rich.

If this picture were true it would mean that the government was not just bad but mad. For it is difficult to see how any administration in a functioning democracy could ever hope to succeed with such a policy.

They say you should never let the facts get in the way of a good argument. But I intend to give the House some facts. I intend to show what has been achieved in terms of tax equity over the last six years.

We tend to live in a little world of our own in this country some times, blissfully unaware of what is going on elsewhere in Europe or of how other people see us.

Eurostat recently published a comprehensive analysis of the tax treatment of lower-paid workers right across the European Union. Specifically, they compared the tax rates for single persons earning two thirds of the average production wage in each country for the year 2001.

The findings are interesting. The tax rate was 45% in Germany, 47% in Sweden, and a whopping 49% in Belgium. These states are often held up as role models in social equity for us by left-wing commentators.

The country that came out best in the Eurostat analysis was Ireland. We had the lowest rate of taxation on lower-paid workers of any country in the EU. With a tax rate of just 17% we were way below every other member state.

I prefer to look at it as Ireland being way ahead - ahead in our commitment to tax reform, ahead in our commitment to lower-paid workers, and ahead in our commitment to real social justice.

Some people marvel at why, despite the international downturn, Ireland remains at or near full employment while other countries struggle with the effects of mass unemployment. All I would say is: look at the Eurostat figures. They tell the story.

A similar picture is painted in a comparative study by the OECD.

That study looked at the direct tax burden of the typical industrial worker with a family. The tax burden was over 20% in Sweden, Belgium and Germany and was as high as 30% in Denmark.

The direct tax burden on the average industrial worker with a family was lowest of all in Ireland. In fact, the actual tax burden in Ireland was negative.

In other words, when our very generous child benefit payments are taken into account, the typical industrial worker with a family is actually a net recipient of cash from the state.

These are very significant achievements. They put us at right end of the international league tables. And they show that the reform measures introduced by this government have had real effect.

As leader of the Progressive Democrats I can assure the House that my party yields to no one in its commitment to social justice and fair taxation. As deputy leader of the government I can assure the House that this administration yields to no one in its commitment to social justice and fair taxation.

It's a sad reflection on the left in Ireland that its main political campaign is to ensure that the people of Castleknock do not have to pay refuse charges.

The polluter pays principle is widely accepted not just around Europe but around Ireland. People recognize that waste collection is an essential public service and that it has to be paid for. And people recognize too that they should pay in line with the amount of waste that they produce.

Politics is essentially about the interplay of ideas, the competition between differing views of the world, different approaches to economic management.

Throughout the developed world the great battle of ideas is essentially between leftism and liberalism.

I believe that leftism is losing that battle in all parts of the free world now. And I believe that leftism is certainly losing that battle here in Ireland.

Our success in this country has been built almost entirely on the application of sound liberal values. We have reduced taxes on enterprise, investment and employment. We have opened markets to competition. We have reduced the role of the state in the economy.

The net effect of these policies has been spectacularly positive. We have ended emigration. We have moved to full employment. We have achieved the effective elimination of long-term joblessness.

And we have used the proceeds of this economic growth to invest in new infrastructure, to fund better public services and to pay for huge increases in social supports for the less well-off in Irish society.

We take it for granted today that the old-age pension is worth €157 per week. It's hard to believe it was just €99 when this government took office.

We take it for granted today that child benefit is worth over €125 per month. It's hard to believe that it was just €38 when this government took office.

We take it for granted today that the respite grant for carers stands at €735 per year. It's hard to believe that it didn't even exist when this government took office.

All of that progress was made possible by economic success. And that success was achieved by giving the Irish people the freedom to achieve their full potential, to live in their own country, to work in their own country.

That progress was not achieved by taking this country up the political cul-de-sacs favoured by left-wing parties. We did not achieve success by nationalizing companies. We did not achieve success by setting up hare-brained ventures like the National Development Corporation. And we did not achieve success by raising taxes to penalize personal progress.

Indeed it is hard to find any left-wing idea which has contributed anything to our social and economic prosperity in recent times. Left-wing politicians may have contributed something; but left-wing politics has contributed nothing.

Deputy Higgins seeks to lead the Irish left into the wilderness of waste-charge campaigning. Deputy Rabbitte on the other hand seeks to lead the left in the opposite direction.

Social justice is about lifting people out of poverty. It is about giving people opportunities. It is about giving people a real stake in society.

We in Ireland have done that. We have successfully tackled the problem of mass unemployment. We have successfully moved tens of thousands of people out of long-term unemployment and into new and worthwhile jobs.

And the key to that has been the low-tax model of economic management that has been pursued by this government since it took office in 1997. Our approach is working for the Irish people and it is continuing to work.

It will keep this country at full employment. It will secure our future. And it will do more to promote real social justice than any amount of opportunistic grandstanding by publicity-hungry politicians

ENDS/ETE 1147