We need to dismantle our culture of dependency
In Ireland 77pc of working households are funding the other 23pc - that's twice the average of other EU countries
Published 14/08/2016 | 02:30
The Irish economy is growing rapidly. There will be real growth of around 5pc this year. Food, pharmaceutical and IT exports are booming. We are getting massive corporation tax payments from US multinationals. Our demographics are very favourable - we have relatively fewer dependant older people than other EU countries have. Unemployment has fallen to a little below the average EU levels. The Government can borrow money at 0.4pc.
So why are you struggling so hard? Why do you feel so insecure about your future and the future of your children?
You put the head down at college and got a good degree. You did some years of poorly paid training afterwards. You made the financial sacrifices, you worked hard at your career and now you have a decent salary. You should be comfortably off, but you are not. You are paying relatively high income tax, PRSI and USC, not to mention Local Property Tax and water charges. If you have a non-tracker mortgage, you are paying interest rates which are twice what they are in the rest of the Eurozone. You have always paid for your own health insurance, but it has become increasingly expensive, while at the same time, the tax relief has been greatly reduced. You have never had a motor insurance claim, but this year your premium is 35pc higher than last year. You thought you had a good pension, but it turns out that there is a big hole in the pension fund.
And it's probably going to be worse for your children. They are in their late 20s and there is no sign of them flying the nest any time soon, as they simply can't afford it. You made financial sacrifices to get them a good education, and now they have reasonable jobs, but they can't afford to rent anywhere decent, and it's very difficult for them to save up the deposit to buy a house.
It shouldn't be like this. People who have studied and worked hard who now have decent jobs should be able to enjoy the fruits of their labour. They should be looking forward to good pensions on retirement and they should be able to pay for private health care without being made to feel guilty about it. If they choose to do so, they should be in a position to help their kids get on the housing ladder.
So what has gone wrong? Why is there such an imbalance in Irish society and what, if anything, can be done about it?
There is one outstanding statistic about Irish society which is very rarely reported.
Despite having average levels of unemployment, we have the highest percentage of jobless families in the original EU-15 countries, which includes Greece, Spain and Portugal. But it's not just a little more than average, it's twice the average. The average is 11pc but in Ireland, it's 23pc. The next closest to us is the UK at 13pc.
So whereas in other EU countries, 89pc of households work and fund the 11pc who don't work, in Ireland, 77pc of working households are funding the other 23pc who don't work.
Why do we have 23pc jobless families, when our convenience stores, our restaurants and our hospitals are staffed by non-nationals? Why are the unemployed Irish not bothering with these jobs? Is it because compared to other EU countries, the gap between social welfare and benefits and low paid jobs is very low. It just does not pay for someone with children to work in a low paid job in Ireland.
But this generous social welfare system is not good for the recipients. They have become dependant on the state for their income, their housing and their health services. And the state is not good at providing these things. It would be much better for everyone if social welfare rates and benefits were cut back to the average rates in other EU countries. People would be encouraged to work and provide for themselves rather than become dependent on the state for everything for the whole of their lives.
Social housing is a very good example of how the system is so dysfunctional and doesn't really help anyone. Because of the high level of jobless families, there is a huge demand for social housing, at a level which the state can't provide. But there is competition between social housing and private housing. For example, there is a campaign underway to get NAMA and the Government to build 3,000 social housing units on the Glass Bottle site in Ringsend. But it would be much better if 3,000 private housing units were built there for people who are working and prepared to rent or buy their accommodation with their own money.
If you are from Ringsend and you have a job, you have almost no chance of being able to afford to buy or rent anywhere close to your family home. You will probably buy or rent in Tallaght or Naas. But if you are unemployed and entitled to social housing, you will refuse a house in Tallaght or Naas, and only accept a house close to where you were born.
If we want to create a fairer society and a better society for everyone, we need to dismantle our dependency culture. Cutting welfare and benefits for those who are well able to work, would benefit everyone in the long run.
Brendan Burgess is founder of the consumer forum askaboutmoney.com. His views are his own.