1. Promoting fairer distribution of wealth
Focusing on the effectiveness of national strategies for redistribution and promoting equality.

2. Aim this workshop to reflect on
Effectiveness of national strategies for redistributing wealth between rich and poor (regions and people)
Impact on poverty
Impact on capacity to finance social protection systems
Impact of current crisis
Opportunity to lead to new policy instruments in the Member States .

3. Focus on wealth and redistribution
Role of distribution and redistribution in a model of development
Tax as a resditribution and revenue gathering mechanism
Reducing poverty through the financing of social protection systems
Greater equality generating social cohesion and prosperity for all.
Closing the gap between rich and poor

4. The Irish model Historically poor and under developed welfare state
Conservative approach to social expenditure
Catholic social policy
Focus on poverty alleviation for deserving poor
Deep embedded poverty and inequality
1970’s EU, development
High taxation but narrow base - still low social expenditure

5. The Celtic Tiger model – example of how economic growth model as cause of crisis
1980’s fiscal mismanagement
1987- national recovery based on low taxation model
Reductions in corporate income, wealth and property taxes to stimulate economy
Still low social expenditure and embedded structural poverty
Over reliance on privatisation to achieve social infrastructure in schools, roads and transport
Economic growth and competitiveness stressed at the expense of social cohesion and missed opportunity to tackle inequality

6. Irish tax/welfare model, two sides of coin
Low corporate tax 12.5%
No wealth or property taxes,
Capital gains and inheritance tax reduced from 40% to 20%
High indirect taxes
Low income taxes
Over 50% of payments means tested, stigma and delivery issues
Social insurance not pay related and cuts in eligibility
Social welfare system still gendered (male breadwinner, no care, not individualised)
Payments low – 30% GAIE and below EU poverty threshold

7. Economic model based on growth for growth’s sake, consumption and greed
Significant new wealth – Celtic tiger billionaires
Top 10% - 25% all income and
Bottom 70% - 25% all income (2008)
Not market found wealth
No new wealth tax – significant new tax exemptions and reliefs for this group – income distribution towards the rich - legal and moral corruption
Richest 10% got 20% of income distributed by state ,
Poorest 10% got only 4% of income distributed by state

8. Policy maintained wide gap between rich/poor
Increased relative poverty threshold from 15% a peak of 18% - now lower
Did not so much increase but stubborn and high income inequality on all measurements
Relative (16%)
Gini (.32)
S20:80 (5)
Despite significant increase in expenditure on social welfare it is not increasing in pace with wage growth
But mainly because growth dividend concentrated in top 0.5% of population

9. Realities and trends of wealth distribution - the Irish paradox
National poverty target to reduce consistent poverty (measured by deprivation indicators and relative
It dropped from 15% (1997) to 6.8% (2007).Target to 2% by 2012
Significant real increases in social welfare
More due to drop in unemployment from 17% to 4.8%
Risk of poverty shifted from unemployed to those most distant from labour market
Jobs central to anti poverty strategy
Risk of poverty and reality of poverty expected to increase significantly in recession

10. Current impact of crisis - not what you expect
The widening gap between rich and poor is being highlighted as a consequence of the crisis but not necessarily the case for Ireland
Real income of the poor increased while income of the rich declining
Market losses
Government redistribution policy
Budget 2009 Income poorest 20% increased by 5%
Budget 2009 Income losses for top 10% decreased by 9%
Recent policy has been highly redistributive – very significant and only possible in context of new more conflictual distributional politics of
Adult relative/consistent poverty declining in Ireland by 4.5% in 2009 but lower poverty threshold rather than increases in SW payments.

11. New strategies for redistribution - recession a political opportunity for a more distributive tax/welfare model
Tax increased by 9% (higher) and 5% lower – now 52% and 28% - could have been increased without recession – challenge to keep
Tax broadening needed - indirect taxes highly regressive but potential for corporate taxes, green taxes, curtailment of tax exemptions and reliefs and wealth taxes
Little short term potential for increasing social expenditure – case to be made for refocusing towards activation & and targeting (by taxation and efficiencies)

12. Positive proposals – opportunities in current economic crisis.
Carbon Tax revenue could be used to tackle fuel poverty
Redirecting budget on early childcare subsidy to a more targeted direct provision of quality pre school
Reviewing and focusing welfare payments (18-21’s incentive for education – don’t be afraid to look but be careful who is hurt – women, children hurt by most recent restrictions)
Universal pension paid for with existing 3bm tax reliefs –
women, low paid and precarious workers

13. Politics – they can legitimately claim they are narrowing gap between rich and poor
BUT
Don’t be fooled by statistics
Judge success by the reality of the lives of the poor – listen to poeples stories
Unemployment hitting hard, health impacts significant, people are struggling, real income down, people feeling very vulnerable, invisible cuts adding up ……….
EAPN need to find new way to tell the story

14. New architecture No model is sustainable unless it is fair
Growth is unsustainable, growth is meaningless without redistribution strategy
New paradigm to achieve human development
New paradigm has to tackle wealth and inequality