The Distribution of Income in Ireland (2000) - Combat Poverty Agency

XIV The Distribution of Income in IrelandForewordxvrelative income poverty, i.e. greater inequality will result ingreater poverty. Secondly, from a social justice or moral pointof view, it is unfair or simply wrong that the benefits of economicgrowth are not shared more equitably, and that thosewho have most, benefit to a greater extent. Thirdly, incomeinequality is bad for social cohesion and inclusion, leading toalienation of marginalised groups, and the high social costs thatthis alienation or marginalisation can impose. Fourthly, severeincome inequality limits choice and diversity, and hinders theability of those on low incomes to participate fully in the political,social, economic and cultural life of society. This is a curtailmentof basic rights and is contrary to the principles andobjectives of the Government's National Anti-Poverty Strategy(NAPS). Fifthly, it also appears from research in epidemiologythat income inequality is bad for a nation's health and that thehealthiest nations are not necessarily the richest ones, but theones where there is the smallest gap between rich and poor. 1Finally, it is now being argued by economists that income inequalityitself can be bad for economic growth. 2Severe income inequality implies a poor redistribution ofresources and opportunities throughout society. If public policydoes not intervene sufficiently to redistribute resources generatedby the market, this in turn this implies a poor rate of publicinvestment in social and human capital, and in public serviceand infrastructural development, all of which are essential tothe long-term viability and sustainability of current economicgood fortune.Whether the motivation is the reduction of poverty, the pursuitof social justice, a concern for greater social inclusion or acommitment to economic growth, reducing income disparitiesis a necessary public policy objective.The Combat Poverty Agency believes that a radical incomeredistribution in favour of those on low incomes is central to reducingpoverty and creating an inclusive society - and later inRo W uu^r R (1 " 6) **"****** ^Miction of meguality. London:this foreword particular policy proposals are identified drawingon the lessons from the report's findings. The Agency's currentstrategic plan (1999-2001) identifies narrowing the gap betweenrich and poor as one of its four key strategic objectives, and suggestsin a series of strategic goals, how this may be achievedthrough a fairer distribution of resources, services and employmentopportunities in favour of people living in poverty. 3POLICY CONTEXTThis interest in a fairer distribution of income is not unique tothe Agency, but is a view reflected throughout the current publicpolicy arena, both at national and international levels.The National Anti-Poverty Strategy (NAPS), the official governmentpolicy on tackling poverty, commits the Government to. . . ensuring that the impact of very rapid economic, socialand demographic change reduces social inequalities andsocial polarisation . . . (and) that the benefits of sound economicmanagement and growth are distributed fairly and inparticular are used to tackle the underlying causes of povertyand social exclusion (Government of Ireland, 1997: 2). 4The Action Programme for the Millennium, the current governmentaction programme, aspires to everyone sharing the benefitsof economic growth. 5 The current national agreement, theProgramme for Prosperity and Fairness (PPF), aims to substantiallyincrease the resources allocated to social exclusion. 6 Therecent UN World Summit on Social Development in Genevaidentifies the need to "encourage Governments to re-evaluate,as appropriate, their national fiscal policies including progressivetax mechanisms, with the aim of reducing income inequali-3 Combat Poverty Agency (1999) Strategic Plan 1999-20001. Dublin: CombatPoverty Agency.4 Government of Ireland (1997) Sharing in Progress: National Anti-PovertyStrategy. Dublin: Stationery Office.Fianna Fail and Progressive Democrats (1997) Action Programme for the NewMillennium. Dublin: Stationery Office.Government of Ireland (2000) Programme for Prosperity and Fairness. Dublin:Stationery Office.