The Commission on Taxation and Welfare was established in June 2021 and tasked by the Government to consider how best the taxation and welfare systems can support economic activity and promote increased employment and prosperity in a resilient, inclusive and sustainable way, while ensuring that there are sufficient resources available to meet the costs of the public services and supports in the medium and longer term. There are 13 members of the Commission coming from a variety of sectors / backgrounds including research and academia, former civil and public servants, civil society, enterprise, and business.
A public consultation entitled “Your Vision, Our Future” was launched by the Commission in October 2021 and closed on 17 January 2022. Chapter Three of the accompanying document was entitled Facilitating Employment, while the online questionnaire was entitled Promoting Employment. The difference in title is interesting as to facilitate is defined as make (an action or process) easy or easier, while to promote is defined as support or actively encourage (a cause, venture, etc.); further the progress of.To make decent employment a reality for people more distant from or excluded from the labour market requires public employment services and supports (which includes tax and welfare) that not only facilitate their inclusion, but actively encourage it and strive to make real progress.
In the document the Commission noted that “The Government aims to target resources to the benefit of our people to reduce poverty and deprivation and to promote active inclusion by helping people access and sustain employment. Workers and employers in turn contribute via taxation, including through PRSI, which is then used to fund benefits etc. Increasing employment involves supporting the economic activity of employers to facilitate job creation and to deliver high quality pay and conditions for workers. It involves successfully aiding those who are unemployed to find work or by facilitating those outside the labour force to join it. The Commission on Taxation and Welfare has been tasked with considering what changes if any, should be made to the social insurance system including how welfare policy can work in tandem with the taxation system to support economic activity and encourage employment while supporting our most vulnerable.”
The introduction to this section of the on-line questionnaire distilled this paragraph down to two main areas:
- what changes, if any, should be made to the social insurance system.
- how welfare policy can work in tandem with the taxation system to support economic activity and encourage employment, while supporting our most vulnerable.
This narrowing down of the focus is understandable for a body entitled the Commission on Tax and Welfare. However, for many people struggling to deal with their unemployment, to make ends meet, it is the combination of welfare, tax and services that are key. In particular, that services are supportive and ensure people can make informed decisions that will lead to better outcomes for themselves and their families.
The four specific questions asked in this section were:
- What reforms to the taxation and welfare system should be considered to ensure that taxation and welfare work in tandem to support economic activity and promote employment while also supporting those most vulnerable in an equitable way?
- Does Ireland’s taxation and welfare system strike the right balance between maintaining the incentive to increase earnings and alleviating some of the risks of low income (poverty and deprivation)?
- Are income supports equitable in terms of how they treat people of working age? How is this balanced with the requirement to meet differing needs?
- What changes to the social insurance system should be considered to ensure sustainability into the medium to longer term? (Please note the recommendations of the Pensions Commission and NESC Report 151 on the future of the Irish social welfare system)
On March 3rd and 4th, 2022 the Commission held consultation events and the INOU participated as a panellist on the first day on the panel entitled Now What? The panel on the second day was entitled Socially Just Future Tax and Welfare. The Commission is due to report to the Minister for Finance by July 2022. The INOU's submission to the COTW can be found (linked here).