By Conor McCabe.
This is the fourth and final article in a series adapted from the Unite union’s policy document, Hope or Austerity: A Road Map for a Better, Fairer Ireland After the Pandemic, written by Conor McCabe.
The current crisis is an interplay between Covid-19 and the deep-rooted inequalities and structural underinvestment that have facilitated its impact in Ireland. With the exception of the government’s move to temporarily reclassify private hospitals as Section 38 institutions, the measures so far have been income-based, not structural.
The agendas of banks and landlords have been protected above the interests of other businesses and the wider community. Income-based measures can be reversed overnight; structural measures cannot. This is a signal as to how the government sees the present crisis and where its interest lies. The forthcoming Fianna Fáil/Fine Gael-led government will do little to change that.
The trade union movement will play its role in protecting the interests of its members and their communities. This means not only holding the line against austerity and cuts but advancing a progressive programme in housing, health, childcare, home care, the environment, and workers and societal rights.
These are landmark times. Here is an opportunity to advance our interests and enable workers and communities to flourish. The following is a set of proposals to facilitate that process.
Trade union rights
Covid-19 will be with us until a vaccine is developed and distributed. Medical experts stress that this will take between twelve and eighteen months. This means that the current lockdown and social distancing measures can only be relaxed once we have the following in place:
- Mass testing with real-time results;
- Faster contract tracing;
- Proper, continued supply and distribution of PPE to all frontline and essential workers;
- Health system (including nursing and care homes) fully supplied; with necessary equipment, staff, and resources.
As a result our health, nursing home, retail, food and accommodation, waste, postal, transport, cleaning services, and homecare workers must be designated as ‘essential workers’ in law for the purposes of statutory employment regulation/recognition, ensuring adequate pay and conditions. This includes the provision of personal protective equipment (PPE) and other physical safeguards.
At the same time we need to have confidence that measures are working. Guidelines or ‘best practice’ procedures will not be enough. These protections must be on a legal footing and subject to workplace checks by trade unions. This is to ensure that our members are protected, and that employers adhere to the regulations.
It is imperative that trade unions are given a statutory right to access to the workplace as well as a statutory right to be heard: the right to represent, and advocate for, their members and to have that right recognised by employers.
At the moment an employer can decide whether or not to talk to a trade union representative working on behalf of their members. It is a bit like the prosecution in a court case deciding whether to recognise the defendant’s barrister or not – or the judge saying that the barrister must sit down and keep quiet, and the defendant argue their case alone. It is a ridiculous situation and one that needs to end.
As an example, it was workers on building sites going to their trade unions that got construction sites shut down because of Covid-19. The government was content to keep them open, risking the lives of those workers and their families. Only for trade unions, in particular Unite and OPATSI, there would not have been a pressure point to have that policy changed.
The trade union movement already provides an essential role in monitoring health and safety in the workplace – and given the Covid-19 pandemic it is absolutely essential that it is finally put on a statutory footing. To facilitate this process, a dedicated Covid-19 workplace safety hotline for essential workers should be established.
At a minimum, all state support to the private and public sectors must be on the basis of trade union access and recognition. State support includes any grant, loan, or tax break availed of regardless of size, as well as any public procurement contract.
Vetoes and opt-outs for statutory bodies such as Joint Labour Committees (JLCs) are no longer tenable.
The crisis has also exposed the need to increase the minimum wage to a living wage. We cannot have full-time work that does not pay enough for a perosn to meet their bills and care for themselves and/or their families.
Covid-19 has also exposed the crisis in bogus self-employment. While at the moment bogus self-employment is against social protection rules and the tax code, its enforcement is weak and effectively non-existent. There is a need for a dedicated investigative unit, comprised of trade union representatives, social protection officers, and tax officials, with powers to issue strengthened fines and penalties, in order to tackle this deeply-embedded practice.
Measures we need to tackle bogus self-employment include:
- Frontline service workers classified as essential workers;
- Full trade union recognition and right to access to the workplace;
- An end to bogus self-employment and the establishment of a dedicated investigative unit;
- Minimum wage raised to the living wage;
- Covid-19 workplace safety hotline for essential workers.
The move towards a single-tier health system must be continued. It cannot be reversed. Covid-19 has shown that despite decades of blockage and bluster it was entirely within the powers of government to create a single-tier system if it had the desire to do so. The current hold-out of 600 consultants cannot be used to stifle and thwart this change.
As part of this process, all Section 39 workers should be reclassified as public sector workers. They provide healthcare, elderly, substance abuse, suicide prevention, and social inclusion supports, as well as education, community development and many other services in communities across the State. We cannot continue the current two-tier system of rights and conditions that exist for workers in these sectors.
Childcare also needs to be seen as a community service, based on a public service, not for-profit, model. All childcare workers should be reclassified as public sector workers.
There is an absolute need for a major nationwide public housing building programme. Housing must be made an essential public service, as well as a constitutional right, so that the needs of the community are not superseded by the profit-seeking rights of land-hoarders. This will tackle both the rent crisis and housing lists, and act as a stimulus to work creation and community re-development. No public land should be sold off to private developers – public housing only on public land. All ‘co-living’ units should be banned on social and health related issues.
The pandemic has shown up the extent of the damage that Airbnb has done to the rental sector in our cities and towns. There was a 64 percent rise in rental properties in Dublin alone in the space of a week in March. Yet despite more availability and subsequent drop in price, Dublin City Council is paying ‘full whack’ for Airbnb and vulture fund apartments for use as homeless accommodation, according to Dublin city councillor Anthony Flynn.
We need a ban on Airbnb from all areas with housing waiting lists, and for it to be made illegal for Airbnb to advertise such services in those areas where it runs counter to the public interest. It has mutated into a parasitic practice, one that needs to end.
Measures we need to see to bolster public services include:
- A single-tier health system, including nursing homes and home care.
- Section 39 workers reclassified as public sector workers
- Childcare as a community service, with workers brought into the public sector
- Major nationwide public housing building programme
- Public housing only on public land – no more selling off of public land to private developers
- Co-living units to be made illegal
- A ban on Airbnb from all areas of housing need
Now is not the time for tax cuts. We need to invest and the continued hollowing out of our tax base will simply undermine that process. Nor will tax cuts create stimulus or demand.
The nature of the current crisis is such that we are facing into a drop in GDP this year of anywhere between 8 to 13 percent. The only way to counter that will be through a massive government-led investment programme – which is why the European Central Bank (ECB) has been calling for such action from Eurogroup member states.
We cannot support any cuts to the property tax, USC, or income tax at this time. And given the ECB’s own stimulus actions, nor it is the time to introduce corporate or business tax breaks. The ECB will provide enough liquidity to the system to keep credit flowing. The blockage, if there is any, is with bank lending, as well as insurance and commercial rent payment levels.
Although it may seem counter-intuitive, there is a need for selected tax measures to increase revenue and to give direction to the need for investment. There are a number of tax measures that exist to increase profit of personal wealth. These are a cost to the state at a time of public stimulus. One example is the decision of the Revenue Commissioners to waive the 183-day residency rule for tax exiles during the lockdown. This will not save one job or build one house. This should be shut down immediately.
There is also a need for a wealth tax – the purpose of which is not so much to bring in additional revenue but to map the nature of wealth in this state and the purpose to which it is being used. Then, and only then, can we see what investments are being made and whether they help or hinder a more progressive society. The rich fear a wealth tax because it shines a light on their investments. It brings to the attention of the state that which they want to keep covered.
Finally, we need to begin the process of raising employer PRSI to EU levels. If we are to build a properly-functioning health and welfare system, we need sustainable levels of tax to cover its ongoing functions.
Ireland has the lowest level of comparable PRSI contribution in the EU. According to the most recent figures (2018) it equates to 3.8 percent of GDP and is 26th overall. The EU average is 12.2 percent. Even when we discard GDP and use amended GDP (GNI*) instead – Irish GDP is heavily distorted due to the country’s use as a tax haven – the figure is not much better. Irish PRSI equates to 5.6 percent of amended GDP/GNI* which is 25th overall in the EU, with only Malta lower at 5.4 percent.
In order to provide the type of sustainable social protections needed, a roadmap towards sustainable PRSI needs to be drawn up.
Taxation measures must include:
- No cuts to USC, income tax, or property tax at this time
- No corporate or business tax breaks
- A roadmap towards PRSI contributions to EU average
Time to borrow and invest
The era of balanced budgets is over, and with good riddance. It is time for the government to borrow and invest. This will achieve three things: it will help build a more progressive and sustainable public housing and health system, it will deliver the environmental measures that that are essential to a sustainable future, and it will counter the fallout from the expected drop in GDP.
But in going down the road of government stimulus, we need to be vigilant that the mistakes of the past are not repeated. There is little point in the government providing grants, loans, or tax breaks in order for workers and businesses to make rent, insurance, and loan payments. The only stimulus here will be for banks, landlords, and insurance companies. Nor can stimulus be used to bail out industrial and commercial practices that are environmentally damaging. Now is the time to change those practices, and to do so in a job-rich and sustainable way.
As stated above, we need a debt and rent freeze and subsequent write-down for the coronavirus months, coordinated by government and the state, and tied into the liquidity response that the ECB has already undertaken. There is no societal or economic gain in using stimulus to cover dead money. Banks and landlords must take a hit, with the ECB stimulus there to ensure the financial and corporate system itself keeps on functioning.
The government needs to force banks to channel ECB loans directly to the distressed sectors of the economy. If they refuse to do so, the Strategic Banking Corporation of Ireland should be reconstituted to take on this task. Either way, ECB stimulus should be used for just that – to stimulate and protect distressed sectors, not be used as a cash cow for private banks.
Finally, in order to facilitate job retention and creation, the current private insurance model needs to be tackled. The three biggest drains for most businesses are commercial rents, commercial rates, and insurance cover. Contrary to the media narrative, wage rates are not the biggest issue. However, because rents, rates and insurance are involuntary payments, most businesses will make cuts in wages and staffing in order to meet them. This process will intensify after the lockdown. In other words, rents, rates, and insurance will act as a block to the rehiring of staff – and even if the business is in a position to open at all. These need to be tackled in order to facilitate the move towards increased employment and stimulus in the real economy.
Fiscal measures required are:
- A massive state-sponsored public housing programme;
- Banks required to target interest-free loans towards vulnerable sectors and businesses and provide government guaranteed loans if necessary;
- Interest free overdraft facilities for affected businesses;
- The creation of an affordable state sponsored insurance system for business for essential insurance cover;
- Commercial and residential rent moratorium with a process for the orderly write down of rent and associated debt built up as a result of the crisis;
- Legislation to ensure credit history is not affected by missed payments during the crisis.
Just Transition and a Green New Deal
Now is the time to build our sustainable future. We can do this through a just transition and a green new deal. As Ciarán Nugent and Paul Goldrick-Kelly of NERI have argued:
“In the context of negative interest rates, low levels of private sector investment and impending environmental collapse, there is a compelling case for targeted state-led investment to drive a growth and employment enhancing transition to a low carbon economy.
“As private sector investment is lacking, demand-side measures from government will be central to kick-starting green industry and green employment, and protecting communities reliant on environmentally unsustainable industries.”
This is all the more important in light of the lockdown and subsequent economic downturn. Governments will have to invest in order to avoid a depression – and that investment must be environmentally-focused.
At the same time we need to have a just transition that will provide decent jobs, social protection and security to workers, as well as to those communities most affected by the transition, to a sustainable economy. It must ensure that all climate policies are socially and rurally proofed.
No workers or communities can be left behind in the move away from peat production to more sustainable forms of energy generation. This is of prime importance for the Midlands and Moneypoint in County Clare, with ESG and Eirgrid to the forefront of national planning and design of our renewable energy network.
All new housing must be built to the highest environmental standards, and the roll-out of retrofitting accelerated.
We need a clear plan to protect and enhance biodiversity, and protect food sovereignty through the protection of family-owned farms.
We cannot allow the right-wing and neoliberal voices in Ireland to dominate and shape the pathway out of the current crisis.
We need to ensure that our collective future is one where we have ‘seized the means of care’ and build the type of community we desire.
The trade union movement has a vital and important role to play in this process.
Dr Conor McCabe is a research associate with UCD Equality Studies Centre, and the author of Money (Cork University Press, 2018). Follow him on Twitter @CMacCaba.
Read the full report, Hope or Austerity: A Road Map for a Better Fairer Ireland After the Pandemic, published by Unite the Union here. Follow Unite on Twitter @UniteunionROI.
Top image: Illustration by Anton Medvedev/Shutterstock.