Tip:
Highlight text to annotate it
X
An important of work for pubicpolicy.ie will be to look at what’s happening to income distribution
Since the peak of the boom in 2007, national income has fallen by a sixth
We are facing a very difficult adjustment under the Troika programme – we are going to have to cut Government borrowing from 10% of GDP last year (2011) to 3% of GDP by 2015
This will affect the living standards of everyone in the country
It is very important that that burden of adjustment is not only fair but is seen to be fair
Tax changes made by Government since 2007;
these have broadly been progressive in that people at the top of the scale have paid more as a percentage of their income than people at the bottom
But CSO, the Central Statistics Office, numbers show that the distribution of income became more equal between 2004 and 2009
but surprisingly between 2009 and 2010 it became more unequal -thereby reversing all the progress that had been made in the previous 5 years
It is very important to try and understand why that happened and it’s not clear at the moment why it happened
It may be due to the very sharp rise in unemployment which possibly hit those at the bottom of the scale
It is important to understand it because unless you fully understand the problem, you can’t put in place the appropriate measures that are necessary to deal with it.