14.4% Gender pay gap issue relegated.

By Orla O’ Connor.

The National Women’s Council of Ireland (NWCI) has campaigned for a gender budgeting approach to be implemented by Government. This would mean that all budgetary measures were assessed for their impact on men and women. We would have got a very different budget had this been done.

A recent ESRI and Equality Authority study highlighted the greater loss of income for women in comparison to men over the years of the economic crises. It provides hard evidence that women have suffered more under austerity.  Women in couples suffered a 14% loss in income levels compared to 9% for men, and this gap widened further for those on lower incomes. The tools are there for gender budgeting but Government has refused to apply them and this is the outcome.

The NWCI has continually highlighted that those on the lowest incomes have shouldered greater losses and contributed a higher proportion of their income in direct and indirect taxes over the economic crisis. Rather than a squeezed middle, we have an increasingly hard-pressed majority with over 50% of all households relying on some form of social transfer to keep them way from the risk of poverty. Women and children have been hammered by these austerity measures, consistently bearing the brunt of reduced income and cuts to services.

Budget 2015 provided the opportunity to begin to reverse these trends. The Government chose not to, and introduced a pre-election Budget aimed at voters on higher incomes. The cut in the top rate of tax to 40% was unnecessary, and there had been no popular demand for it. The changes introduced to income tax and the USC left workers with incomes of €33,800 to €70,000 effectively unchanged, but the greatest gain went to those with incomes of €70,000 or more. In addition any increases to incomes for the low paid in Budget 2015 are negated by the impact of  increased property and water taxes, on families.

Small gains were made. The five-euro increase in child benefit is a partial recognition of the cost of living increases for families. The NWCI had called for an increase in the lead up to the Budget. However, this measure, worth approximately €70 million, does not offset cuts to the payment which amount to over €400 million since 2009.

Changes to social welfare in Budget 2015 will have a particular impact on women. Women are more likely to be in low-paid, precarious work, and their income is more likely to have dropped during the recession.  The extension of the allowance for child dependants for the first months of employment represents a partial recognition of the poverty trap that exists in the transition between welfare and work for many women. However, it does not address the issue of those trapped in such precarious work. Incentives for employment in this Budget should have been designed to deliver quality jobs.

The NWCI had called for an increase to the minimum wage. This would recognise increases in the cost of living and address low pay.  It would also have a direct impact on reducing the gender pay gap that stands at approximately 14.4% (according to the CSO in 2013 – the European Commision figure is somewhat lower. See graphic opposite). A Low Pay Commission was announced in the Budget. This has the potential to deliver reform and increased living standards for those on low pay. However, it must deliver real and quick change in determining a decent standard of pay for all that is relative in some way to those on high incomes.

The increase in the living-alone allowance is significant for older women. The ending of the pension levy, however, does not address the ongoing inequality in private-pension tax relief for high income earners. It merely takes us further from badly needed pension reform. In addition, changes to the contributory pension bands, which have hit women the hardest, were not reversed.

The ESRI and the Equality Authority have shown that Budgets are not gender neutral. Once again we are witnessing a Budget that has given priority to higher earners and predominantly male earners.  This shows how those in power have failed to learn from our past economic mistakes about the negative impact of economic and gender inequality on our society. •

Orla O’Connor is Director of the National Women’s Council of Ireland.