Opinion

By Dr Ruth Barrington The Children and Family Relationships Act 2015 was passed in April this year. When it is commenced, the legal landscape for families in Ireland will change dramatically. From Treoir’s perspective, the guardianship provisions are the most significant and are the subject of this article. It is likely that the guardianship provisions of the Act, which affect unmarried parents (particularly unmarried fathers), will be commenced before the end of this year. While many of the provisions of the Act are very welcome and beneficial for children and families, particularly non-traditional families, the legislation is not a panacea and many inequities will remain, especially in relation to unmarried fathers. Guardianship rights flowing from cohabitation Approximately 36% of children are born outside of marriage each year and 46% of first births to women in Ireland each year are outside of marriage. Currently, unmarried fathers have no automatic guardianship rights to their children. This means they have no legal right to be involved in the major decisions about the upbringing of their child, for example those relating to where the child lives and goes to school; decisions on consent to medical treatment, on the religion of the child or on consent to adoption. When commenced, the legislation will confer automatic guardianship rights on unmarried fathers who have cohabited with the mother for one year, three months of which must be after the birth. This is a major step forward for those fathers who qualify for automatic guardianship under this provision and who can demonstrate that they meet the criteria. What about fathers who are not living with the mother? Many non-cohabiting fathers play a very active role in their children’s lives and are very important to their children. There is nothing in the Act to benefit these fathers or their children. Their status will remain as it is at present – unless the mother agrees to sign a Statutory Declaration for joint guardianship, these fathers will have no option but to apply to the court for guardianship. It is regrettable that the legislation does not go further towards ending this area of discrimination against unmarried fathers. Shared parenting should be promoted in every way possible because it gives children the possibility of a nurturing relationship with both parents and their extended families even if the parents are not living together. Joint guardianship at the point of birth registration Many parents wrongly believe that having the father’s name on his child’s birth certificate gives him guardianship rights. This is not so and it is usually only if and when a relationship breaks down that it comes to light that the father has no legal rights in respect of his child. A welcome provision was inserted in the legislation whereby it will now be possible for Birth Registrars to witness the signing of statutory declarations by unmarried parents appointing the child’s father as a guardian. Unmarried parents can complete the form when registering the birth of the child or within two weeks of registration. If the parents do not agree to sign the declaration at the point of birth registration, at least unmarried fathers will be alert to the fact that they do not have any automatic rights and that action is required in order to acquire them. Compulsory registration of father’s name Under the Civil Registration (Amendment) Act 2014, which is due to be commenced shortly, it will be compulsory (with some very specific exceptions) to have a father’s name on his child’s birth certificate. This is welcome recognition that children have a right to know who their parents are so they will have a good sense of their own identity and it could change for the better the nature of the relationship between children born outside of marriage and their fathers. Recording Guardianship Agreements It is a source of great regret to Treoir that, despite our efforts over many years, there is no provision in the legislation for a Central Register of Guardianship Agreements. Where a Statutory Declaration is signed by both parents and subsequently mislaid or destroyed, there is no evidence of the fact that the father has guardianship rights to his child. This can have dire consequences, such as a child losing contact with his/her father (particularly where a mother changes country of residence). As there is no Guardianship Register it is not possible to know how many children of unmarried parents will have the benefit of a legal relationship with their fathers. It is extremely disappointing that not even the Declarations witnessed by the Registrars of Births will be recorded and there will therefore be no record of the number of Declarations witnessed by the Registrars. We have a national register of who owns every square meter of land in Ireland and yet we do not know who is responsible for our most precious resource, all of our children. Frances Fitzgerald, Minister for Justice, said that she would commit to setting up a working group to investigate the feasibility of a Guardianship Register. Treoir calls on the Minister to promote this as a matter of urgency. Court-appointed guardians (other than parents) When the Children and Family Relationships Act is commenced, grandparents, step-parents and those who have acted in loco parentis can be granted guardianship by the Court. This will be a different and lesser form of guardianship than that enjoyed by parents. From a list of rights specified under section 49 (6C) (9) of the Act, a court will be empowered to grant selected rights. In the absence of a Guardianship Register, it is unclear how professionals (social workers, doctors, teachers passport office staff etc.) and other family members will know which selected rights a guardian has and who must be consulted when significant decisions are being made in relation to children. Undoubtedly the legal position of many unmarried fathers will improve as a result of the Children and Family Relationships legislation. However, Ireland is still very much out of line with other countries where the

By John Gormley It didn’t take the political establishment long to adapt to the outpourings of public sympathy for the refugees. The initial limit of 600 was quickly upped to 1,800 when Fine Gael spokespersons were asked about the numbers of refugees that Ireland would accept. Not to be outdone, Labour leader, Joan Burton, mentioned a figure of 5,000. Across the water, David Cameron also executed a swift U-turn when he saw that the public mood had switched from hostility to compassion for the distressed migrants. Cameron knows that this is the most sensitive of political issues and one which could figure large in the forthcoming EU referendum. He is keeping a watchful eye on Nigel Farage who set out his stall in typically uncompromising style on Sky News. UKIP is opposed to further immigration because, while it might contribute to increased economic growth, it will register negatively on ‘quality of life’, an argument designed to appeal to all those conservationist Tories with their Range Rovers and Barbour waxed jackets. They certainly don’t want an increase in population to 80 million people – the figure casually thrown out by Farage – in an already densely populated country. And this is where a curious and uncomfortable alignment occurs between the ideas of these reactionary forces and so‐called deep green thinkers. Consider for a moment the Malthusian ravings of Dr William Stanton from ten years ago: individual citizens, and aliens must expect to be seriously inconvenienced by the single-minded drive to reduce population ahead of resource shortage. The consolation is that the alternative: letting nature take its course, would be so much worse. The scenario is: immigration is banned. Unauthorised arrivals are treated as criminals. Every woman is entitled to raise one healthy child. No religious or cultural exceptions can be made, but entitlements can be traded. Abortion or infanticide is compulsory if the foetus or baby proves to be handicapped. When, through old age, accident or disease, an individual becomes more of a burden than a benefit to society, his or her life is humanely ended. Voluntary euthanasia is legal and made easy. Imprisonment is rare, replaced by corporal punishment for lesser offences and painless capital punishment for greater. We shouldn’t distract ourselves for too long with the dystopian vision of Dr Stanton, but there are saner voices who have warned about the influence of resource depletion and climate change on global migration patterns. According to UN estimates, if our current population growth continues with normal ‘demographic drivers’ there could be between 235 and 415 million international migrants in the world by 2050. However, climate change increases the potential for additional mass migration. The Stern Report (2007) put this figure at an additional 200 million, whereas a Christian Aid report of the same year came up with the more alarming figure of an additional one billion migrants as a result of the climate crisis. The current Syrian refugee crisis is ostensibly the result of a complex civil war, but a recent report by the National Academy of Sciences concludes that the severe drought between 2007 and 2010 contributed to the conflict. It resulted in the migration of traditional farming families – about 1.5 million people – to urban areas where they found it difficult to find work, leading in turn to civil unrest. Scientists have also suggested that climate change may have played a role in the drought in north Africa that led to increases in food prices, and sparking the discontent of the Arab Spring. Similarly, another UN Report concluded that climate change had played a role in the Darfur conflict. The accumulating evidence points in one direction: the current migration crisis is not a temporary phenomenon, but the ‘new normal’, with the potential to become a defining and deeply polarising issue. Angela Merkel knows that the public mood can change very quickly. So far, the Germans are happy to accept tens of thousands of well-educated Syrians who, no doubt, will contribute meaningfully to the German demography and economy; but would they be as welcoming of poor black Africans with few qualifications? Pegida and the AfD in Germany and the emergence of far right nationalist parties in Sweden, Denmark and the Netherlands betoken a racist undercurrent in these liberal countries. No such parties have succeeded in Ireland. That’s not to say that the Irish are morally superior or that the same disdain for migrants does not exist here. Most TDs will tell you that many Irish voters express concern about the numbers of migrants. According to one survey, up to 70% of Sinn Féin supporters believed there were ‘too many’ migrants. Sinn Féin, to their credit, have never attempted to make political capital from this disquiet. But now that one in eight people in this state are non-national, well above the Western average and considerably higher than in Britain, migration will rise to the top of the Irish political agenda. Migration, the concomitant of climate change, is set to challenge our moral certainties in the most unimaginable way. •

By Sinéad Pentony A real plan for reducing inequality is needed as we approach Budget 2016 and this is what Anthony Atkinson offers us in ‘Inequality: What Can Be Done’. Inequality is not inevitable, he states, and the process of reversing the trend of growing inequality requires political engagement and concrete steps. This conclusion is based on decades of analysis of inequality by Atkinson. It is rooted in his ambition to map out the policy measures to start the process of reversing the trend towards growing inequality and of narrowing the income gap. This is not utopian as much of what is proposed already exists in a number of Northern European countries. Atkinson defines the problem as not just being about the rich getting richer, but also that we are failing to tackle poverty, while the economy continues to change rapidly, and the majority are left behind. Rising top incomes and stagnant low incomes are partly caused by long-running trends such as globalisation and technological change. These trends and their consequences can be altered by policy, Atkinson argues. Governments play an important role in shaping the direction of technological change. The state, he says, should be conscious of its role in the innovation process and take account of its effects on income distribution. The development of autonomous driverless vehicles, for example, is currently being undertaken by a number of global tech companies including Apple and Google. Much of the research behind this innovation is being sponsored by the US government. This development may eliminate millions of jobs for less-skilled workers. However, if workers had a stronger voice, state-sponsored research could focus on creating factory technologies that complement the skills of workers in the manufacturing sector. Similarly, trends in globalisation, Atkinson argues, are not inevitable but the result of decisions that are taken. Talks on the Transatlantic Trade Investment Partnership, for example, are on-going behind closed doors and involve governments and corporations. The voices of consumers and workers are largely absent from these talks, but the impact of decisions made will have a direct impact on the lives of millions of workers and consumers. Such decisions are too important to be dominated by the interests of corporations and their shareholders. The increasing pace of technological change is driving up demand for more skilled workers. However, the education system is not producing enough people with the required skills in the necessary numbers to keep up with demand. This is creating wage inflation at the top. The obvious answer is to increase investment in human capital, education and training. But this won’t address income inequality on its own. Atkinson defines income as including earnings, income from capital (investments such as pensions) and welfare; the sum of which is reduced by direct taxation. This means there are many forces in operation with regard to increasing and decreasing the income gap. These include the welfare state and taxation; jobs and pay; and the ownership and transmission of wealth. These three areas form the basis of fifteen proposals from Atkinson to start the process of reducing income inequality. In the area of welfare and taxation, Atkinson proposes more taxation and more public expenditure. He points to the post-World War II era and the impact of high marginal rates of taxation and of the creation of the welfare state, in narrowing the income gap. In contrast, OECD research highlights that from the mid-1990s the reduced redistributive capacity of tax-benefit systems was sometimes the main source of widening household-income gaps. Atkinson draws on earlier research (see Chart 1) to show how the top marginal income tax rates have reduced since 1960, and the corresponding increasing income share of the top 1%. In Ireland, the marginal rate of tax has been reduced by approximately 25% over this period and we are the third highest in terms of the increasing share of income going to the top 1%. Proposals in this area include: increasing the marginal rate of taxation, with a top rate of 65%; increasing inheritance tax; introducing property tax (where it doesn’t exist); substantially increasing child benefit and taxing it as income; increasing social insurance or introducing a basic income; and increasing Official Development Assistance. When considering Atkinson’s proposals in an Irish context it is important to understand Ireland’s fiscal policy as a low-tax and low-spend economy. Chart 2 illustrates the extent to which we differ from other EU countries in this regard. We know that Budget 2016 will include tax cuts in the region of €750m. This is likely to include reductions in the Universal Social Charge and increasing the threshold before inheritance tax is applied. The top marginal rate of tax was reduced from 41% to 40% in Budget 2015. We are moving in the opposite direction from that recommended in Atkinson’s proposals for reducing income inequality in terms of taxation and spending. This is a political choice and not an economic necessity. The Nevin Economic Research Institute states in its latest ‘Quarterly Economic Observer’ that “sustainable fiscal policy is as consistent with high levels of revenue and spending as it is with low levels of revenue and spending…”. As to jobs and pay, Atkinson proposes: the adoption of an explicit target for reducing unemployment; offering guaranteed public employment; developing a national pay policy with the minimum wage set at the Living Wage; and active policy-making in the area of technological change. He recommends that the State becomes an employer of last resort, in the same way that it is the ‘lender of last resort’. In Ireland, the unemployment rate currently stands at 9.6%, with a target to reduce this to 6.9% by 2020. While the unemployment statistics are moving in the right direction, Ireland still has one of the highest rates of jobless households in the EU, with almost one quarter of household (23%) falling under this category. The quality of the jobs is just as important. Policy needs to reverse the growth in precarious work, including zero-hour contracts and workers being forced to

By Constantin Gurdgiev Stock and bond markets have been rocked on the waves of volatility, the doom of deep corrections and the highs of rapid reversals. The summer of 2015 will go down in history books as a period when the markets have finally reverted to pricing in real fundamentals. And the process of market ‘normalisation’ is proving to be a disruptive one. After years of living on the hopium of endless easy money pumped into the economy by central banks and governments, the markets have finally started to embrace reality: in the eighth year of the fabled global recovery, economic growth around the world is faltering. ‘China Tremor’ The August bear correction in the global markets was not the first alarm for investors. And it won’t be the last. The first signs of a deep rot in the global economy registered as the 2013-2014 move by investors out of Emerging markets and a dramatic uplift in demand for lower risk assets, such as Government bonds. By mid-2014, clouds over emerging markets had spread to corporate bonds, with flash sell-offs and increased volatility hitting lower-grade junk bonds. The storm rolled on to the commodities markets with oil setting into a precipitous decline in mid-2014, followed by other industrial commodities and agricultural staples. By early 2015, there were tremors hitting European Government bonds. Currency valuations shook. In May-June, a wave of volatility hit the sovereign bond markets, as ECB purchases of Government paper resulted in a dramatic widening of spreads and the fear of markets seizing up. Corporate debt caught the flu with dramatic increases in risk assessments for global corporate bonds. All along, trouble was brewing in the Far East: global trade was falling off the cliff, largely unnoticed in the mainstream media. The Chinese growth engine was stalling and the Asia-Pacific region was swept by repeated rounds of currency devaluations. Finally in August a massive blowout in stock markets, triggered by a collapse in Chinese shares prices, drove panic across both the advanced economies the emerging markets. On August 24th, after weeks of historically anomalous volatility, the Shanghai stock exchange fell almost 8 percent, with the Nikkei, EuroStox 500 and S&P500 all erasing on average just under 5% of their valuations. By the end of the month, massive volatility in the markets around the world pushed share prices into recovery. Still, Shanghai was down 12 percent, the US S&P was off 0.1 percent, Japan’s Nikkei shed over 4 percent and the EuroStox index was 1.5 percent lower. At the time of the market nadir, global equity falls had erased some $5.7tn of paper wealth. All in, August ended with the S&P down 6% marking the largest monthly drop since May 2012; the EuroStoxx had fallen 8.5%, the index’s worst performance since 2011. The FTSE is down around 10% while the ISEQ lost next to nothing. Market turmoil was so sharp that the VIX index, a gauge of investors fear, reached its highest level since 2011 at the end of August, while a broad basket of agricultural and industrial commodities hit its lowest level since the start of the century. Oil dropped to its lowest level since 2009, down almost 50% over the last 12 months and 22% since June’s high. Copper hit a six-year low on August 24th. China’s devaluation of its currency on August 11th sparked forest fires across the market. Contagion quickly spread to its core trading partners, such as Japan, South Korea, Indonesia, Malaysia and Singapore. Having devalued the yuan by some 5 percent overnight, the Chinese authorities made matters worse by subsequently aggressively intervening in the markets, selling US dollars and buying Chinese stocks. All told, estimates from market analysts suggest that China sold more than $100bn worth of US Treasuries to partially fund foreign exchange interventions and stockmarket support measures, within just two weeks between August 12th and August 26th – more than it did in the previous eight months combined. This put fear into the $64 trillion worldwide bond markets: as equity investors rushed into the safety of US bonds, sell orders were flooding in from the largest international holder of Treasuries, China. Some Financial Lessons to be Learned The ‘China Tremor’ taught us several valuable lessons. The first one was that global investors should not count on Chinese authorities to mind international markets corner. Throughout the entire crisis, Beijing’s sole concern was, and remains, insulating the Chinese economy from spillovers from market turmoil. In the process of pursuing this goal, China is willing to go to currency war, as well as deploy a range of measures aimed at curbing trading that cuts across its objectives. The second lesson is that Chinese markets – no matter what their direct impact may be on individual economies – are systemic to global finance. In a sign how interconnected the markets and investors’ strategies are in modern financial environment, consider the following dynamic. When Chinese authorities started selling US Treasuries to defend the yuan, many institutional investors worldwide were holding so-called risk-parity portfolio positions. This strategy involves borrowing heavily to invest in low-volatility assets, such as advanced economies’ Government bonds. The return to such bonds tends to countermove with stocks returns, so booming stock markets imply shrinking bonds returns. But leverage (borrowing) allows investors to bring their profits closer to those that can be earned by holding much riskier equities. Thus, at the end of August, many institutional investors worldwide were banking on a continued negative correlation between stocks and bonds returns, along with low volatility in bond prices. Once China started selling US Treasuries, three things happened: bonds prices moved down in line with falling share prices; bond prices became more volatile; and leveraged funds were forced to cover mounting losses. A sell-off of risky assets across global markets ensued to cover the latter. The third lesson is a forward-looking one: given the Chinese Government’s commitment to support economic growth, the pain of the Chinese economy’s adjustment to the new realities will be borne

Stock and bond markets have been rocked on the waves of volatility