Tuesday, 15 December 2009
Dáil Eireann Debate
Deputy Enda Kenny: I would like to raise with the Taoiseach the consequences of last Wednesday’s budget. Bearing in mind that the hype and big discussion are over, the consequences are becoming evident for a great many people. Politicians stated in the House that, in accepting the fact that there was a requirement to secure a reduction in current spending of approximately €4 billion, there should be a sense of fairness in the budget. I want to address this very issue.
Fine Gael has tabled a motion for Private Members’ time dealing with the consequences for the disabled, blind and carers who cannot work because of their circumstances. The contacts made with me as a politician over the past weekend and the graphic descriptions given of the circumstances that apply in respect of these three categories suggest clearly that this budget is demonstrably unfair and mean. Let me outline why.
The pension for the blind is means tested. If a person who is blind has any means or is married to a person of means, he or she cannot draw the pension. Those who do qualify apply for the old age pension when they reach the qualifying age because it is of a higher value. There are only 1,500 people in this category nationally, yet the Minister has taken €8.60 off them every week. They cannot work and they have a very strict means test applied to them.
Carers provide over 3 million hours of care every year because of their love of kith and kin. Let me tell the House about Tom from Arklow, whose case is public. He looks after his loved one because she has had multiple sclerosis for 16 years. Tom was an IT consultant earning €400 per day, or €2,000 per week, and is now a full-time carer. The conditions specify that the care must be full-time. Tom’s allowance has been cut by €8.60. His loved one is in a wheelchair. The house must be heated because she cannot move around, thus incurring a higher cost than would normally be the case. The carbon tax will result in their paying extra for travel. The woman’s dietary requirements are such that the cost of living in the house is higher than normal.
The same applies to all the disabled. The Government, in seeking cuts in the order of €4 billion, has actually aimed the political gun at the most vulnerable, including the blind, carers and the disabled. The Taoiseach and I have been in houses and have seen people with dementia and incontinence and we have noted the pressure on those who look after these people on a full-time basis. These carers save the State an average of €40,000 each, which amounts to hundreds of millions of euro every year, yet the response of the Government has been to take €8.60 off each of them. It has pumped billions of euro into a black hole of banks and has allowed people with pensions of more than €100,000 to walk away untouched.
Every Minister with any gumption should be ashamed to walk up those steps to vote against the motion against these measures. I ask the Taoiseach not to divide the House tomorrow on an issue that is as sensitive as this, where there are defined numbers and cases. Many of those affected are in their houses having to put up with the cruel consequences of this Government cut. With so many other options available, will the Taoiseach tell us now that he will reverse these cuts?
The Taoiseach: The Government had to consider how we could have a sustainable social welfare system going forward against the fact that the revenues coming into the Exchequer are at the same level that they were six years ago in 2003. In the meantime, when resources allowed, there were, rightly, significant increases way beyond the cost of living increases for social welfare recipients. The Government is quite proud of what it achieved during those years.
The Taoiseach: In the pre-budget outlook, the Government had to take a position on social welfare spending reductions, a spend of over €22 billion against just €32 billion coming into the coffers. That is not a sustainable position.
The rate of savings identified meant all areas of expenditure had to be examined, including social welfare. The Government sought to carefully consider the matter and ensure that the level of reduction or contribution from various blocs of public expenditure was least in the social welfare area.
That being said, I recognise that any reduction in social welfare rates is a disappointment to their recipients. We made this decision out of the necessity of ensuring that we have a social welfare code going into the future which we can sustain. On the one hand, we cannot agree that a €4 billion adjustment needs to be made while, on the other, suggest there are easier ways for it to be found. It is a difficult exercise but one which had to be undertaken by the Government in a considered way.
While there has been a cut on average of €8.30 on all working payments for those under 66 years, excluding dependants of pensioners over 66 years, the cost of living is back at February 2007 levels. Welfare payments, even after these cuts, will still be at 2008 levels. At 2003 revenue levels, social welfare rates would have been 50% lower than they are today.
The issue is how savings in the social welfare code can be ensured. We all understand the cuts affect recipients but they have been introduced in such a way as to protect them to the greatest extent possible. There has been a reduction in the cost of living. The increase of 3% in welfare rates in the 2009 budget means there is a net effect of 1.1% considering the consumer price index and the cost of living impact on welfare recipients.
Others have been protected such as the 475,000 old age pensioners and the 430,000 children in low-income or welfare-dependent families. We had to focus the savings wherever we could. Unfortunately, it was not possible to construct a budget without a contribution from the social welfare budget. We had to make those decisions. That the cost of living came down this year helped us maintain people’s living standards despite the cuts made.
Deputy Enda Kenny: The Deputy Cowen I knew had a genuine feeling for the voiceless, for those with no trade union, for those with nobody to represent them except their associations and public representatives.
The Taoiseach spoke about the social welfare system going forward, the €22 billion in social welfare expenditure, the pre-budget outlook and the Government’s understanding that a contribution had to be made. The cost of excluding carers, the disabled and the blind is €108 million.
Deputy Enda Kenny: In the Fine Gael alternative proposals, it would have been possible to exclude all categories. Regarding the point of going forward, as the Taoiseach said, and it causes people trouble, budgets are always about choices. My contention is the Taoiseach has made a very bad choice. For example, had the Government chosen to accept more of the McCarthy report’s recommendations on the elimination of quangos, it would have saved €175 million. By doing so, the Government could have left untouched the carer’s allowance for Tom, looking after his wheelchair bound wife in Arklow. By doing so, it would not have had to take €8.30 off the 1,500 recipients of the blind person’s allowance, all of whom are means tested anyway.
Deputy Enda Kenny: There was an easier way to find these moneys when the Taoiseach claims there was not. As Fine Gael has pointed out for the past two and a half years, it could have easily been done with the elimination of quango after quango. The Taoiseach was informed in writing this would save €175 million.
If the Taoiseach proceeds down this line against this motion this evening and tomorrow, he will divide the public representatives of all the people on the issue of social welfare allowances to carers, the disabled and the blind.
Deputy Enda Kenny: Every Government Member who walks up those steps tomorrow during the division on the motion should be ashamed of what they have taken from those who have no voice, no trade union and no one to come to this House to argue for their case every day.
What about the amount carers save for the State because of love of kith and kin? The message sent out to them is that they do not count and neither does their work. It is not good enough to say we gave them more in times of plenty.
Deputy Enda Kenny: These are the people who have no voice with no one to speak for them except for the few who do in here. Tomorrow, the Government will have an opportunity to vote on this motion. The Taoiseach must reverse these cuts. There is another way he can find €108 million in cuts and not take €8.30 a week off carers, the disabled and the blind. If he does it before Christmas, everyone will say the Taoiseach has done the right thing at last.
The Taoiseach: It is easy for the Leader of the Opposition to suggest continually that there are easier ways of finding money. The €4 billion that we recalled simply stabilises the deficit. We still have an Exchequer borrowing requirement this year of €18.8 billion.
The Taoiseach: We still have to reduce our indebtedness over time. We must recognise and confront that reality in the best way we possibly can. While acknowledging one is open to criticism when one touches a social welfare rate at any time, the best prospect of maintaining the levels of support the Government built up over the years must be sought. The value of what is being provided for people is €10 ahead in terms of what they were getting in 2007 and the cost of living at that time.
The Taoiseach: They are, of course, difficult facts. No one is suggesting it is easy. It is not easy for any Government. I am sure it was not easy for the Government of which the Deputy was a member which gave only €1.50 per week extra to pensioners. I am sure that was a difficult decision and that that Government was not in a position to give any more.
The Taoiseach: We debated the issue at which time I am sure the Government was criticised for its decision. The fact is we are in a new economic situation. We are in a situation where we have to deal with the issues.
The Taoiseach: It is not a sustainable position to suggest that we can have a €22 billion social welfare bill next year and have receipts coming into the Exchequer of €32 billion and then look after public service pay issues, programmes, capital programmes and everything else.
The Taoiseach: The most unfair and callous thing one could do would be to suggest that a no change policy could be sustained into the future. That is not possible. It is better to be frank and candid about all areas of expenditure.
Deputy Eamon Gilmore: When the Order of Business has concluded the House will begin to debate a Bill to cut the pay of State employees and to unilaterally change their conditions of employment. I want the Taoiseach to clarify two matters for me before we begin that debate.
First, will the Taoiseach clarify to whom exactly the Bill will apply? There was speculation over the weekend that it might apply to employees of semi-State companies but that appears to have been clarified. The Schedule to the Bill excludes the semi-State employees. However, there is a provision in the Bill which appears to extend the application of the pay cut not alone to direct employees of the State but to employees of any body which is wholly or partly funded by the State. This presumably means it would be extended to employees of voluntary hospitals, community development projects, family resource centres——
Deputy Eamon Gilmore: ——Leader programmes, development organisations and charities. I want the Taoiseach to tell me if the cuts in pay will apply not alone to direct employees of the State but to all bodies, as stated in the Bill, which are wholly or partly funded directly or indirectly out of moneys provided by the Oireachtas or from the Central Fund.
Second, will the Taoiseach tell the House what impact the cuts imposed under this Bill will have on the weekly household income of a family of a clerical officer in a Government Department married to a library assistant, both earning €30,000 per annum and who have three children? What will be the weekly reduction in that household’s income?
The Taoiseach: I do not have in front of me the tables in regard to the impact of the cuts. Obviously, there will be a 5% reduction up to a certain level in respect of the people to whom the Deputy refers.
The situation is as set out in the Schedule to the Bill. The Minister for Finance will outline the provisions in detail on Second Stage and during Committee Stage. The categories of employees to whom it applies are as confirmed by the Deputy.
Deputy Eamon Gilmore: With regard to those to whom it applies, it is stated that it will apply to a body that is wholly or partly funded directly or indirectly out of money provided by the Oireachtas or from the Central Fund or the growing produce of that fund. As I understand it, that extends the application of the pay cut not alone to direct employees of the State but to all those employed in the various voluntary sectors that are funded by the State, including voluntary hospitals and so on. Frankly, I find it difficult to see how this can be done given that the contracts of employees of those bodies is not with the State but the bodies which employ them. That is what the Bill says. The Taoiseach has not thrown any more light on the issue in his reply.
Deputy Eamon Gilmore: ——on a family made up of a clerical assistant and library assistant, each earning €30,000 per annum and who have three children, the answer is €70 per week. Of course, the Taoiseach does not know what will be the impact of the cuts because the Government did not bother its barney to assess what would be the impact of its budgetary measures——
Deputy Eamon Gilmore: ——on low paid employees and on the type of people, as referred to by Deputy Kenny, who are impacted by the cut in social welfare payments. There is a requirement on Government — it is in the Cabinet handbook — that every measure before Government be poverty proofed. It is to be examined to see what impact it will have on those who are in poverty or at risk of going into poverty. When the Labour Party asked last week in this House where was the document in respect of poverty proofing of the budget and why it was not included in the budget documentation and laid before this House, none of the Ministers present at the time knew anything about it. They knew nothing about any type of examination to see what type of impact the measures in the budget would have on poor people. The Taoiseach’s answer today confirms that the Government has not given a second thought to what will be the impact of its budgetary measures on the lives of people in receipt of social welfare payments or in respect of cuts to the earnings of low paid people. The Taoiseach cannot even tell this House today what will be the reduction in the family income of two people impacted by the cut in pay at the lowest level. The Government did not give a second thought to this issue. It does not give a curse for people who are poor or in receipt of low pay.
The Taoiseach: We are back to the polemics again. I was asked a specific question during Leaders’ Questions in regard to which one would not have information unless one had a table. I stated there will be a 5% cut.
The Taoiseach: No, the Deputy is playing word games and trying to suggest to the media that the Government is indifferent in terms of the impact of the cuts. We are well aware of the impact. It is 5% up to a certain level and then moves on to 7.5% and beyond. We have the tables. In respect of this budget, I make the point that taking 2009 and 2010 together, what is termed progressivity, people paying more at the higher end, is the case as a result of what we have been able to achieve in 2009 and 2010 taken together.
The Taoiseach: ——is the Opposition saying, “Yes, of course, it should be €4 billion” and “Yes, we will be responsible and we will make sure that we come forward with the expenditure cuts” and when it comes to the crunch saying, “No, not that way” and “Think up some other way.”
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