2010

Open Pre-Budget Letter to Minister Mary

Harney TD regarding FAS and the HSE

Cover Picture: Mary Harney with patient Emma Bergin

age 13 from Kildare at the official opening of the
extension to the National Centre of Medical Genetics at
Our Lady's Children's Hospital, Crumlin. Taken from
Irish Government News www.MerrionStreet.ie
Letter Submitted by: Paul Cassidy: M.Sc. Rural &
Regional Resources Planning; Dip. Environmental
Resources Management; Political Strategist & Policy
Advisor. Location: Knockatallon Monaghan.
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Open Pre-Budget Letter to Minister Mary Harney TD regarding FAS and the HSE 2010

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Dear Minister Harney

I’d like to thank you for taking time out from your busy schedule to attend my Father’s funeral , July 2 nd.
2009, at St. James’ Gate Parish. Maurice Eugene Cassidy was one of those PAYE workers who lived
through the days when workers could lose as much as two thirds of their wages in taxes but who also
enjoyed the benefits of the ESB’s health insurance and pension plan and passed those benefits onto his
widow, Monica. The thing that impressed me most about my Father was the fact that he took just five
pounds from his wages per week for cigarettes and walked to work in Fitzwilliam Sq., to save the bus
fare, weather and time permitting. The irony being that he’d probably still be with us today if it hadn’t
been for that one ‘Fix’, he allowed himself.

This submission is influenced by personal impressions of our mixed public-private health system formed
while visiting my Father over the five years leading to his death; by my own academic expertise formed
while lecturing on public policy in UCD and the DIT; and by my first hand experience of FAS having
become long-term unemployed in 2004. I’ve spent the last year familiarising myself with the social
media and engaging in debates relevant to Irish public policy. I have been particularly struck by the fact
that those rich in rhetoric when it comes to the defence of public services offer no coherent taxation
policy with which to fund those same services.

In the absence of any authentic effort on the part of populists to address the need to defend public
services I wish to argue the case for the introduction of a Health Tax of 10% for the medically uninsured
as a global solution to this year’s budgetary problems. I also propose the integration of Community
Employment Schemes with local government and for FAS to be replaced by a National Construction
Institute with Regional Technical College (RTC) status at Edenderry, County Offaly. These proposals are
based on a critique of ‘Wasters’, (Shane Ross and Nick Webb), the focus being chapters three and four,
relating to FAS (‘Behind the Scenes at FAS’) and the HSE (‘The Sickness of the HSE’), ministerial portfolios
of your own. Given the pressure you’re under I merely intend to outline the proposals here and offer a
concluding comment, commencing with FAS by way of addressing the issue of unemployment first.

FAS Proposals:
Where FAS is concerned I’d urge you to encourage the Minister for Enterprise, Trade and Innovation
(Billy Kelleher TD) to integrate Community Employment Schemes into Local Government and to increase
CE Scheme functions to include provisions for maternity-paternity related jobsharing and community
level training placements. The new EU Maternity Directive, making six months paid maternity leave
compulsory, provides an ideal basis for introducing a culture of jobsharing.

At present Social Welfare recipients and their Department of Social Welfare and Family Affairs (DSWFA)
training allowances are being directed into a FAS network of industry focused private trainers which was
driven by Celtic Tiger needs to fastrack new recruits into the workforce. We need an immediate shift in

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Open Pre-Budget Letter to Minister Mary Harney TD regarding FAS and the HSE 2010

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focus towards providing internationally accredited quality training courses integrated with CE Scheme
placements and work opportunities at home and abroad. The best option is to integrate CE Schemes
with Local Government and to upgrade the National Construction Centre at Edenderry to RTC status.
FAS’ inhouse training capacities should be redeployed to this existing €6.7Million Centre opened in 2009
(‘Wasters’, P69-70, Paras 4-1). This new National Construction Institute would be funded by the DSWFA
allowances allocated to trainees.

Local government is already well equipped to manage CE Schemes through its various development
boards and placement agencies, a process began during you own term as Minister for Local Government
and the Environment way back when. The Local Government system is far less open to manipulation as
a system of political patronage by virtue of its disparate, transparent and accessible nature. At present
just €390M of FAS’ near €1Billion budget is spent on CE Schemes. Axing the agency would free the
balance of the budget for CE Schemes, Jobsharing, and the new National Construction Institute. Trainees
attending the Edenderry Institute could take up placements on CE Scheme’s many of which are well
provisioned with plant and machinery as local developers recommit to community agendas.

The new EU Maternity Directive offers a great opportunity to link local government and CE Schemes
with jobshare placements by channelling trainees and scheme participants into jobshare placements at
no extra costs to employers enabling Ireland to comply with the Directive whilst creating a culture of
jobsharing. With almost 30,000 births per annum a jobshare programme based on maternity leave could
significantly alleviate the jobs crisis. If six months optional paternity leave were also allowed one could
expect such a scheme to produce 50’000 placements per annum. If we succeeded in creating a culture
of jobsharing this dimension of CE Scheme could blossom to include general cover for part paid
voluntary leave in which case a national jobsharing initiative could become a structural component of
the fight against joblessness. Minister Kelleher could choose to cap jobshare participation at 100,000
placements if he chose to. Part time integration and job options are already a component of CE
Schemes.

Assuming an average wage of €250/week one hundred thousand, six month, placements would cost
€650M/annum. The combined CE Scheme and Jobshare costs would exceed FAS’ current budget of
€970M (Wasters, P73, Para. 1) by a mere €70M adding an incredible 100,000 jobshare placements to
the CE Scheme’s 20,000 placements. Unlike CE scheme placements jobshare placements are not limited
by capacity issues as those capacities pre-exist in the workplace. The purpose of this proposal is to show
what could be done within the existing FAS budget but the Government could give serious consideration
to a national jobshare programme aimed at reducing unemployment to a structural level of 4%. Four
hundred thousand part-time placements (whether six monthly or ‘week on week off’) would cost
€2.6Billion and could be administered by the DSWFA in conjunction with the county development
component of Local Government.

With almost €600Million being wasted annually at FAS; the Edenderry National Construction Centre
already completed; Local Government well geared towards taking over the management of CE Schemes;

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Open Pre-Budget Letter to Minister Mary Harney TD regarding FAS and the HSE 2010

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and the EU Maternity Directive on the way; a massive safety valve is available to government where
unemployment is concerned at nominal added cost to the tax payer: €70M! Imagine the positive
feedback generated from the 100,000 unemployed given placements; 50,000 workers taking parental
leave; 50,000 taking part paid voluntary leave; and from employers saving on voluntary leave pay as well
as creating a pool of part-time labour from which to draw on in an upswing.

Health Services Executive (HSE) Proposals:

Defending the State’s mixed public/private system means guaranteeing its annual budget of €15Billion
by introducing a health tax for the medically uninsured; as well as addressing the PPARS debacle
(‘Wasters’, P80, Para, 2-3) and the clear indication it presented of irregularities in the HSE payroll. With
over two thirds of the national HSE budget going on wages and less than a third left for actual medical
and infrastructural costs a comprehensive ‘Face to Face’, census of HSE staff would seem to be in order.
Guaranteeing the HSE’s €15Billion budget, addressing irregularities in payroll and amending Medical
Consultants contracts (by appointing ‘Public Surgeons’, rather than ‘Medical Consultants’, to Local
Hospitals) should make it possible for local hospitals to survive and thrive.

The DSWFA budget is increasing towards €25Billion/Annum as the unemployment rate climbs to
500,000. The combined cost of Social Welfare and Health now exceed the total tax revenues of the State
requiring every other cent to be borrowed at six percent interest. Perhaps half a million working
households in receipt of children’s allowance make no net tax contribution. Still Social Justice Ireland
recently called for low paid workers (€15k/annum) to receive rather than pay tax. Ireland’s worker tax
burden is 20% lower than that of Belgium and Germany (50%); we have the most generous social
welfare system; the highest minimum wage; the highest public pay rates and the most comprehensive
Social Partnership Process in the EU if not the world. Just 20% of Irish households pay 80% of the labour
related tax. Some would suggest that those 446,000 households make up the €3Billion budgetary deficit
at a cost of roughly €7’000 per household (2006 Figures). Others propose to burden mortgage holders
further with domestic rates having already taxed health, house and life assurance as well as inflating
domestic interest rates inviting a catastrophic wave of domestic debt default which will destroy both the
community and commercial banking sectors.

The Good news is there is a single fix all taxing solution: the introduction of a 10% Health Tax for the
medically uninsured. Over half of the two million plus labour force is currently medically insured the
balance being either low paid or unemployed, in roughly equal measure. The yield from taxing social
welfare and the low paid should exceed €3Billion. The tax could be deducted at source from everyone
without a valid medical insurance policy number. Being optional some contract workers and business
people may chose to opt for health tax due to the insecurity of their income while some social welfare
recipients may chose to maintain medical insurance considering unemployment to be a temporary
setback. The simplicity of the proposal allows for flexibility of response based on a personal assessment
of best interests. The introduction of Health Tax would likely encourage those undecided about taking

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Open Pre-Budget Letter to Minister Mary Harney TD regarding FAS and the HSE 2010

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Health Services Executive (HSE) Proposals contd.:

out a medical insurance to do so. The attraction of Health Tax however would be the automatic cover
given to the domestic dependents of the unemployed and low paid. Those outside the tax net - by virtue
of not receiving social welfare or turning a profit - would not pay as they would have no taxable income.
Refugees would also be excluded as indeed would tourists without medical insurance.

The combined consequence of health tax and increased medical insurance uptake would result in a far
higher yield to the health service guaranteeing HSE budgets and greatly reducing dependence on
exchequer transfers. Many will argue that we are taxing the poor to maintain some of the most overpaid
and inefficient public sector workers in the state. While that may well be the case it still does not justify
half the Labour-force making no meaningful contribution to public health costs. If there is a single
justifiable reason for those on social welfare and low pay to pay tax it is to secure their health
entitlements in a manner which defends the mixed public-private ethos of the Irish health system. The
tourist sector could enjoy a curious spin-off from the fact Ireland’s open access mixed public-private
health system would effectively extend cover to medically uninsured overseas visitors and guests.

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Open Pre-Budget Letter to Minister Mary Harney TD regarding FAS and the HSE 2010

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In Conclusion:
i. Integrate CE Schemes with Local Government: Having organised itself around fortunes of the
Celtic Tiger FAS is an inevitable casualty of the recession. The Government’s commitment must
be to the Labour-force not FAS. The CE Schemes are best integrated with Local Government
development bodies and the €390M annual budget re-directed accordingly;
ii. Edenderry National Construction Institute: The FAS National Construction Centre at Edenderry
should be given RTC Status and designated an Institute ensuring workers qualifications are
internationally recognised and an industry standard established. The Institute’s funding would
derive from DSWFA trainee allowances while work placements could be secured via CE Schemes
and the Jobshare Programme;
iii. The EU Maternity Directive and Jobsharing: The EU Maternity Directive provides an ideal
opportunity to integrate a jobsharing programme with Local Government via CE Schemes. In
addition to the 20’000 plus CE Schemes participants a further 100,000 could be given jobshare
placements at an additional cost of a mere €70M to the State;
iv. A National Jobsharing Programme: Solving the issue of redundancy in the Labour-force is
Capitalisms ‘Achilles heel’. The EU Maternity Directive could prove the backbone of a National
Jobsharing Programme aimed at keeping unemployment at Celtic Tiger levels (4%). Creating
400,000 Jobshare Programme would cost €2.6B (€250*26*400’000) managed by DSWFA in
cooperation with Local Government and local CE Schemes. Unlike CE Schemes which are limited
by capacity issues a Jobshare Programme would not be subject to capacity constraints.
v. Health Tax of 10% for the Medically Uninsured: The introduction of 10% Health Tax for the
medically uninsured would generate in excess of the €3Billion savings the Government is trying
to achieve in this year’s budget while placing the HSE on the road to sufficiency in funding
terms. It would further prime the medical insurance market forcing many undecided to make up
their minds. Health Tax would create comprehensive medical cover for the entire population
and Ireland could boast an open door medical health system even extending cover to tourists.

Ministerial Appeal: Minister, you are the proverbial ‘Woman of the Moment’, by virtue of the portfolios
you have held and your acumen for discerning ‘Rational-Politik’, from crass populism. Your advocacy at
Cabinet level is critical to advancing these proposals. This is about socially responsible economics
capable of meeting critique without falling victim to rhetoric. Health is the one door that should remain
open being the veritable ‘Good Samaritan’, of State services (Luke 10:29-37) and we must tax
accordingly. Redundancy in the Labour-force, the ‘Achilles Heel’ of Western economics, can at last be
addressed via jobsharing initiatives arising from the EU Maternity Directive. A National Jobshare
Programme could remain a key component of Labour-force planning through the economic vagaries our
open economy is susceptible to benefitting all: Mother & Child; Family; Community; and Nation alike.

Sincerely, Paul Cassidy

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