SSIA 'free money' scheme makes May Day a black day

9 May 2002

The Irish National Organisation for the Unemployed views with deep concern news that the government's SSIA scheme will cost the exchequer up to EUR 2.4 billion over the next five years.

Normally, May Day, the Feast of St Joseph the Worker, is marked as an international day of workers' solidarity and a celebration of social justice, in Ireland the day has been marked by news that the gap between 'the haves' and the 'have nots' will increase even further because of the government's SSIA 'free money' savings scheme.
Reacting to news that the scheme is likely to cost the exchequer up to EUR2.4 billion over the next five years, INOU General Secretary Eric Conroy expressed concern that the cost of the savings scheme may have consequences on future government spending on social welfare payments and labour market schemes.
'That EUR2.4 billion would go a mighty long way in funding much needed improvements to the needs of people living in consistent poverty and towards closing the gap between rich and poor, which makes Ireland one of the most unequal societies in Europe,' said Mr Conroy. 'The money could have funded taking those on the minimum wage out of the tax net completely. It could also have enabled the INOU's key demand of pegging the lowest social welfare payment rate to 30 per cent of gross average industrial earnings. Our fear is that efforts to combat poverty will suffer, particularly efforts to help those on welfare progress to full employment. Already, the Department of Trade, Enterprise and Employment is cutting back on Community Employment schemes, beyond what was agreed in the PPF national agreement, apparently as a cost saving exercise.'
It is reckoned that over EUR15 billion will be invested in SSIA schemes over the next five years, with the average SSIA account holder investing EUR160 a month.
'It is obvious that only a tiny fraction of the total funds invested in SSIAs will be invested by the unemployed, people on social welfare and the marginalised,' said Mr Conroy. 'For someone who is on a single Unemployment Assistance rate of EUR118 a week, it is almost impossible to make the minimum investment of EUR12.70 (£10) a week. There will simply be too many financial demands on their minimal resources.
'In contrast, someone who earns EUR118 or more a day will find it easy to make the maximum investment of EUR254 (£200) a month - giving such a person a return on investment of EUR63.50 (£50) a month. Those who will most reap the rewards of the SSIA scheme were probably investing in savings schemes, such as pensions, already and needed only to divert their savings to earn a 25 per cent return
'This bonanza for those who can afford to save contrasts sharply with the paltry increases in social welfare payments in Budget 2002, which gave an extra EUR10.16 (£8) a week to those on Unemployment Assistance to manage their living expenses. . Most of this £8 a week increase was eaten up by inflation.
'This is another example of the increased inequality evolving in Ireland in the era of the Celtic Tiger and beyond. At a time when the government finances are deteriorating and all the political parties are planning increased capital spending, it should not be the poor and the marginalised who have to bear the brunt of efforts to balance the state budget in the immediate or long-term future.'