Thursday 21 November 2019

'Banished' Burton is key to turning around our fortunes

Far from being overlooked, Joan Burton has the vital task of getting people back to work, says Kevin Rafter

The shafting of Joan Burton caused many tearful moments when Labour Party members gathered last Wednesday evening at the Radisson Hotel in central Dublin. Despite nine years as her party's spokesperson on finance, Burton was the principal loser in an internal power-play, leaving a sour note on a night of celebration.

By common consensus Burton had been banished to the backwater of social protection. But amid the focus on personality, and the winners and losers from the cabinet merry-go-round, little attention was paid to the appointment of a Labour minister to a portfolio pivotal to the country's economic revitalisation.

The crisis in the Exchequer finances and the collapse of a normal banking system brought the IMF and the ECB to Ireland. The two international agencies showed less interest in our other crisis -- unemployment. Ireland will only grow again when jobs are created, and that agenda has to make employment the only attractive option for those on the dole.

Joan Burton will have little time to pine for what might have been. The unemployment rate last month stood at 13.5 per cent. Figures from the Central Statistics Office put the numbers out of work at 439,200. A short trip down memory lane shows the gravity of the current situation. In January 1978 Jack Lynch accepted that if unemployment went above 100,000 his government deserved to be put out of office.

But the numbers out of work kept increasing. And when unemployment broke the 300,000-barrier in early 1993, RTE broadcast a radio series called The Jobs Crisis. One participant in the series, economist Colm McCarthy spoke about the "pathological failure in which we now find ourselves". If the number on the dole was a "crisis" and a "pathological failure" at 300,000 then it is hard to find an appropriate description for the current number of 439,200.

For a generation the Irish social welfare system has been built on the principle that those on welfare should be as well off as those in work. Few disagree with the concept of a safety net -- the social protection in the new minister's title -- but real fairness has to mean payment for work is higher than dole payment.

New research from UCD put the numbers better off on welfare at about 4 per cent of those on the live register -- still a sizable 18,000 people but even those figures are contested and may be higher. Two years ago the Department of Finance said there were significant numbers on the live register "who are in a position where the difference between in-work income and out-of-work income reduces the incentive to work". That conclusion followed an economic survey by the Organisation for Economic Cooperation and Development (OECD), which warned that there was a risk that the high unemployment rate could be sustained due to generous welfare benefits.

The new Coalition's Programme for Government tip-toes around this fundamental issue. The document promises "the elimination of disincentives to employment" but pledges not to cut social welfare rates. It is hard to see how one can be done with the other. A Commission on Taxation and Social Welfare is to make recommendations on the taxation and welfare systems to ensure that work is worthwhile.

But Burton should dispense with the idea of a commission. Most of the evidence is already available and could be pulled together by a half-decent researcher in a matter of weeks. The starting point is obvious. Burton's Dublin West constituency rival, and now cabinet colleague, Leo Varadkar, has had no difficulty in spelling out the solution.

Varadkar targeted young jobless people, who sign on and find their benefit levels make working less financially attractive. He told the Dail some time ago: "Nobody under 25 should be on the dole. Perhaps it is all right for people under 25 to be on it for two or three months when between jobs, but not after that. We must create a situation where people under 25 who are not in work are given a position in training or education, but they must also be told that it is not acceptable for them to continue to be on the dole and refuse jobs, training or education."

The Fine Gael election manifesto was equally clear: the party said it would no longer subsidise a passive welfare system that did not get people back working. Burton would do well to ponder this. People who are working should be better off than those on welfare. And welfare should be a safety net not long-term income. Social protection has to be redesigned to make work the priority. And before the lefties in the technical group start jumping up and down -- that's not right wing. It's just right.

Sunday Independent

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