Friday, 9 December 2011
Dáil Éireann Debate
Deputy Sandra McLellan: I am in no doubt but that many people believed in the Labour Party before last February’s general election. At that time, the Labour Party had a message of hope regarding an alternative. It would be Labour’s way or Frankfurt’s way. The party of Connolly would protect the interests of workers and the marginalised. However, one should roll on the clock some months. The electorate rewarded the Labour Party for its efforts with the place in government its members so desperately craved. Unfortunately for all those who believed in the message of the Labour Party, the change in Government did not herald a change in policy, politics, strategy or direction. If one ever needed proof, it is contained in this Bill. While the new Government spent its time publicly criticising its predecessors for landing it in this mess, it privately agreed with its approach. Group-think landed us in this position and while Fine Gael and the Labour Party believe group-think will get us out of it, it is obvious it will not. The Government’s blueprint for recovery predicts, in some sort of ironic joke, that in 2015, after four years of crippling austerity and emigration, at least 382,000 people still will be unemployed. The Government acknowledges this but carries on regardless. It acknowledges this but refuses to recognise that alternatives exist or at least it refuses to entertain them.
This Social Welfare Bill will be part of the guarantee that will realise this prediction. That the Labour Party in government — a Labour Minister to boot — could deliver such a Social Welfare Bill in the context of a budget that protected the well-off literally is unbelievable. In this budget, lone parents, the disabled, children, widows and the elderly and vulnerable were perceived as fair game. The effect of the Social Welfare Bill will further cement inequality in Ireland. The Labour Party and Fine Gael have conspired in coalition to deliver a budget that will result in a family in receipt of social welfare benefits and with three children losing more than its equivalent who earns €150,000 per annum, that is, a loss of €1,078 versus €1,050. The Bill under discussion gives effect to much of that difference.
Moreover, the position is not much better for households that are at risk of poverty, one quarter of which are headed by someone who is in some form of employment. A household with three children will lose €228 in 2012 in respect of child benefit alone and an additional €96 from 2013. If a family has four or more children, the loss will be €288 for the third child and €204 for each additional child in 2012, with further cuts scheduled for 2013. This money to a family on the margin literally could mean the difference between heat and cold, food and hunger and, heaven forbid, life and death. For those families reliant on the State for support, this Social Welfare Bill may well pull them under the water. Those who voted for change last February have been sorely let down. This Bill will have a devastating effect on the lives of ordinary people who now, more than ever, need Members of the House to stand up for them. I appeal to all Members to oppose the Bill, as choices and alternatives exist.
Deputy Patrick Nulty: I thank Deputies McLellan and Ó Snodaigh for facilitating this opportunity to contribute to this debate. I believe in the Labour Party and I stand proudly and unapologetically in this Chamber on behalf of the people of Dublin West, who sent me here to represent their interests and to stand up for Labour values. These values have never been articulated better than in the impassioned speeches given last night by my colleagues, Deputies Eric Byrne and Dowds, on community employment schemes and elements of this Bill. Unfortunately, unless dramatic changes are made to this legislation, I will not be able to support the Bill because I believe it contravenes some of the core objectives this country must achieve to get people back to work and to achieve equality and social justice in our society. I acknowledge the Minister shares my commitment to this objective although we may disagree on how to vote on the Bill.
I wish to raise the issue of community employment schemes, which provide a vital resource to people who seek to get back into the labour market and to make a contribution to their communities. This morning, I visited the Blanchardstown Centre for the Unemployed, where many people are employed on community employment schemes and make an outstanding contribution to that community. The decision to cut the materials grants by €1,000 is wrong and will not work. This afternoon, I will be proud to march with those community employment scheme workers, not just from my own constituency but from across the city and beyond, who make a vital contribution and who deserve to have reinstated this grant.
In addition, I welcome the decision to review cuts to the disability allowance. However, the fact it is possible to review and reconsider that payment, which is positive, begs the question as to the reason it was ever included in the provisions. This demonstrates that as a country, we have choices. All of us, as public representatives but more importantly as citizens, can come together, meet our international obligations and deal with the deficit and the debts imposed on us by the disastrous policies of the banking sector, developers and Fianna Fáil but in a way that is fair, that asks those who have most to pay most and that asks that consideration be given to a wealth tax. I note that in response to a parliamentary question tabled in this House a few months ago, the Minister, Deputy Noonan, stated such a tax would generate €500 million. These issues must be put on the table.
In the time available to me, I also wish to raise the issue of mortgage interest supplements. The decision to increase the contribution for households for mortgage interest supplements makes it even more difficult for hard-pressed households already in arrears to meet such payments. It seems illogical to extend to 12 months the period from which one must be eligible for mortgage interest supplement because in the fields of health policy, education and social security, early intervention is the solution. Early intervention provides value for money for the taxpayer and I ask that this provision also be reviewed.
The Bill also contained a decision to review and provide new regulations for the exceptional needs payments next year. I worked for many years for a housing and homeless organisation and the exceptional needs payment comprises once-off payments that often are provided to people emerging, for example, from homeless services to acquire their appliances or the tools that Members would take for granted when moving into a new home. As for what these regulations should contain, I hope the review will ensure the expansion of these payments, the facilitation of people moving out of homelessness and that the process will not be made more difficult.
It emerged today that the decision to make the carer’s allowance subject to income assessment for those in receipt of family income supplement will hit 300 families, all of which are saving the State thousands of euro by caring for a loved one, a friend or a partner. That decision must be reviewed.
There are elements of the Bill that will hit those who have least the hardest. We must ask ourselves whether we can stand over these measures, if there a better way to deal with our problems as a country and these measures will assist people back into education and training or make matters more difficult. They will make them more difficult. Some 20% of the population is at risk of poverty and these elements of the Bill will make life more difficult for them. However, the facts remains that the Government parties could make different choices. I look forward to working with my colleagues in the Labour Party to build an alternative, but I will not support the Bill unless changes are made.
Deputy Paschal Donohoe: As the Deputy said, there are choices to be made. I am very conscious as I make this contribution that at the start of this week a homeless person was found dead on a street in my constituency. The Deputy is correct in saying that what we need to do is to find a way to ensure we can meet our requirements but in a way that is socially just and protects the vulnerable. In the coming days what the people think of the budget and their responses to it will become clear. I was very conscious in the run-up to it of a gigantic fear, particularly among the elderly, that there would be cuts in the benefits to which many hundreds of thousands were entitled and received such as child benefit, the State pension and other core payments. A feature of the legislation is that most of the core benefits, on which people depend to cope with the effects of poverty, old age and help them bring up their children, have been retained and remain unchanged. That is the result of the choices made by the Government.
Other changes were made, on one of which we touched, in respect of which the Government has made a decision to review, which is welcome. The changes will have to be studied and we will have to understand what their impact would be. There is a large number of community enterprise projects in my constituency and I very much understand the valuable work they do. If we are talking about putting in place every measure we can to ensure people are sustained when they are without a job and will have the ability to find one in the future, it is counter-productive to put in place measures that would undermine the viability of projects. I do not believe the measures included in the budget, in particular the measure discussed, will have the effect alleged, but the fact that it has been alleged means it is worthy of study. We must engage with those who have made these points to understand what can be done to mitigate the alleged effect.
In terms of the broader choices to be made, this is a theme with which the House will have to engage in the coming years. We need to debate issues such as the feasibility of introducing a wealth tax, about which I have genuine concern. I will voice my opposition to it, but that does mean there is not a need to debate the matter and understand the issues involved. I am concerned about the idea that there is a large amount of additional tax revenue that could be tapped into by increasing income tax, but we should have that debate. If we do not discuss such issues, we will make the greatest mistake of all in the eyes of the people, that we appear not to care and that we are not actively willing to engage on these choices. I am genuinely concerned that the possibility of a wealth tax being imposed could cause a huge amount on deposit to be withdrawn from the banking system which, in turn, would increase the risks and costs taxpayers would face. There are facts there to support this genuinely held view. In the context of the bigger choices our society has to make, we should find a way inside and outside the Oireachtas to discuss these points and decide what is right and of all the various options, which ones could be taken on board by the Government to ensure vulnerable people are protected amidst all the changes taking place.
In considering the Bill many who had experienced ferocious hardship following the last budget feared there would be cuts to many of the core benefits, but there was none. That is the reason I am supporting the legislation. However, I take Deputy Nulty’s point that many of the measures announced in the budget were greeted with relief, but I accept that feeling was not shared by all. While I will support the Bill which will be passed, if there are concerns regarding its implementation, the very least we can do is to examine if there other ways of achieving savings to ensure we meet the targets set, while also protecting the most vulnerable in society, which is what we all want to achieve.
In listening to Deputy Nulty, I was struck by his sense of social justice. However, he does not have a monopoly of it. Nearly everyone involved in political life is in it because he or she is motivated by the idea of achieving social justice through public service. We may differ strongly on how we want to achieve it, but we have that point in common. In this Bill we have done all we can to strike a balance between the pressures on the economy and the needs of the people. For that reason, it is worthy of support.
Deputy Tom Hayes: I am pleased to have the honour to say a few words about this important Bill. I often had the opportunity when my party was in opposition to speak to the social welfare Bill and relished the opportunity to do so. However, today is different because I am on the Government side of the House. We have to be realistic about where the country is at. In the light of this, I say to the Government: well done for not cutting social benefits, including those for pensioners. As I travelled across my constituency in recent months I met many people, particularly older people who were fearful that their pensions would be cut. While they wished the Government the best of luck with the budget, they did not want to see their benefits being cut. I am pleased to say the Government has not cut their pension benefits. When I attended a function in my constituency last night, I was amazed at the number of people whom I met who said, “Well done on the budget; you were a fair Government to do what you did.” I was amazed at the response to the budget.
While many Members have differing views, we are often removed from what people on the ground think. The public is very fair. It understands we are borrowing almost €300 million a week to run the country and that such borrowing is not sustainable into the future. It does not believe those who say there is another and better way to do it. There is not and it knows it. The people will stand behind us while we debate the issues involved and introduce the necessary measures to make the country a fairer place for all.
I listened with interest to the contribution of the new Labour Party Deputy. I would love to have had a word with him before he made some of his decisions. Like me, he was elected in a by-election. I was first elected to the House in a by-election in 2001. Until earlier this year I was on the Opposition benches, standing up making contributions and speeches week in week out. It is only in recent months that I can say I have been able to participate and do something for the people I represent, because be it right or wrong the structures of the House mean that only those in government can do something for the people.
In recent weeks the issues with regard to the budget, such as health, social welfare, agriculture and job creation, were discussed at our parliamentary party meetings and parliamentary party meetings of the Labour Party, which Ministers attended. Some issues were also discussed on the airwaves. However, the only people who could have a say were the Government parties. They are the people who make a difference.
To anyone who is privileged to be part of a Government team I say there is no better place to make a difference and impact than to be in government, given the structures we have. I wish Deputy Nulty well and I hope his career is a good one, but as somebody who served on the Opposition side of the House for many years I will give him a tip: one can talk for hours and do much research but the system we have here, although it is opening up through pre-budget discussions, means we must be on the Government side of the House to have an impact.
We have also had a good impact on jobseeker’s allowance and benefit which were not touched. Child benefit for the first two children remains unchanged. Payments to carers will be maintained and the half-rate carer’s allowance will continue to be paid to people who are full-time carers and who receive another welfare benefit. The annual respite grant of €1,700 will continue and carer’s allowance remains unchanged at €204 for those under 66 years of age and €239 for those aged 66 and over.
Of course the budget will be tough on many people. Nobody on this side of the House suggests otherwise, but there are plenty of examples of the positive effort made by the Government to protect some of the more vulnerable in society. We saw many examples of the implementation of unnecessarily harsh cuts by the previous Government impacting on pensioners. We all remember the pensioners who attacked John Moloney at a meeting.
Deputy Tom Hayes: We did not see that this morning, and Deputy Ó Cuív is very disappointed about this. He was not here at the beginning of my contribution and the truth is that people are happy. When he returns to his constituency at the weekend he will see that people are very reasonable and understand what has been done and what had to be done.
In the past 24 hours many participants in FÁS schemes have contacted our offices and voiced their concerns about the grant being reduced from €1,500 to €500. If we were living in different economic times and our country was better off one could have left the grant as it was, but we are not. Nothing was mentioned about any of the schemes because they have made major contributions in many parishes, towns and villages throughout the country. I suggest that if it were possible I have no doubt the Government would leave the grant untouched, but it cannot do so. I call on the Minister to put in place a mechanism whereby schemes which demand more goods, cement or materials than others can make a special case and that a window of opportunity be put in place for them.
Much scaremongering has taken place with regard to the community employment schemes. I do not know from where it came, and whether it is from the media or political representatives, but a certain message went out that people would lose their jobs and that the schemes would be closed down in the coming weeks.
The biggest scandal we have witnessed in this country is what happened in FÁS. Anyone who proposes to be part of a party which stood over this should be ashamed rather than heckling and shouting when we want to make very genuine contributions. FÁS was a scandal and I will state this again and again. What happened at the top in FÁS should never have been allowed to happen and the previous Government should hang its head in shame.
Deputy Tom Hayes: Much has been said about the announcement in the budget on disability allowance. I congratulate the Minister for Social Protection, Deputy Joan Burton, on how she handled this issue. When it was announced in the House both Government parties met and asked for it to be changed.
Deputy Tom Hayes: I commend the Government for holding in place social welfare measures, particularly pensions. I hope that before this day is out some resolution will be reached with regard to the FÁS issue.
Deputy Michael Moynihan: I am delighted to have an opportunity to speak on the Bill. I have serious concerns about farm assistance. I want to raise an issue that is before the Department of Social Protection at present, which is that of self-employed people who have found themselves without work in recent years but are not entitled to social welfare. A case was taken in the United Kingdom in this regard. I think the United Kingdom and Ireland are the only two countries with S and A class contributions. I understand a case has been taken through the UK system which is being examined by the Attorney General here. One case concerns a small company, of which a husband and wife are directors and sole traders. The contribution charged on their accounts is incorrect. It was put down as an S class contribution. My understanding is that the advice given to the Department is that it should have been an A class contribution. I also understand the Department and the Minister have been advised on this issue.
This is a serious matter across the country and it has huge implications. Every practising politician in this House, at whatever level, has come across people who have gone to the local social welfare office and found that, because their business has ceased trading, they have no entitlements. I ask the Minister of State to take this matter back to the Minister for consideration. In her reply to the debate, or on Report and Final Stages, the Minister might clarify this issue which concerns the self-employed. As I said, my understanding is that Ireland and the United Kingdom are the only two countries in the western world that are out of sync on this matter. I believe, however, the position has been rectified in the United Kingdom. There is also an implication that the company directors should have paid PRSI, the S class contribution, and employer’s and employee’s contributions would also have to be paid. This is a serious issue which needs to be clarified because it affects these vulnerable individuals.
I do not intend to trade comments across the floor of the House on the Social Welfare Bill, but a number of people have been badly served by it. This is particularly so with regard to family income supplement and the carer’s allowance disregard. We have had a discussion this morning on carer’s allowance, which I acknowledge has been greatly increased in recent years. There was always a sense at Government level that carers should be further looked after. When the allowance started, it was from a very low base. Carer’s benefit was introduced later, in 2001-02, for a period of two years to allow persons to take time off, and a large number of people have benefited from it. Anything concerning the carer’s allowance disregard should be re-examined because it only a small number of people are affected. Government speakers have said the rates have been maintained, but the Government has also sneaked in individual cuts or individual schemes have been removed.
Many groups and participants in community employment schemes have contacted me in recent days. They are saying that while the number of participants in community employment schemes has not decreased, the reduction in the capital allocation will effectively result in many such schemes being closed; thus, those operating schemes will face huge difficulties in maintaining them. Community employment schemes have brought major benefits to both urban and rural communities; therefore, the budget cuts represent a retrograde step. The money hitherto spent on schemes went straight back into the local economy as facilities and materials were provided. By and large, such items were purchased in the local community. In effect, another source of income for local communities is being removed.
There is a lot in the budget that is anti-rural. Various schemes have been established in recent years to maintain services in rural Ireland. A critical analysis of where we are must include an examination of the negative effects of the drive to centralise everything in urban areas. It has happened here, in the United States and elsewhere, but it has proved very costly for the State. People who live and work in rural Ireland are not a great drain on State services, including transport, because they provide their own services. Social planners and departmental decision-makers have been working constantly on this issue, as have groups such as An Taisce, yet the policy has failed across the world. The budget provisions will affect rural schools, local improvement and group water schemes which have made a great difference. Rural Ireland is being targeted yet again because of the cutbacks in such schemes which provide ten times the value offered by similar schemes in urban areas.
Deputy Éamon Ó Cuív: I am pleased the Minister of State, Deputy Ring, is in the House because he is genuinely concerned about ordinary people. No more than myself on the other side of the county border, he has always worked for the less well-off in society. I am incredibly saddened by the approach taken in the budget and will try to explain to the Minister of State why the Government got it wrong.
I am not arguing with the figure of €470 million that had to be taken out of the social welfare budget. Let us be honest: those who think we can go on spending in the way we did, with the same tax take and range of charges as heretofore, are patently wrong. If that were the case, we would have to keep borrowing money. This would quickly become unsustainable. The way in which things were done, however, was wrong. I therefore ask the Minister to consider putting the Committee Stage debate back to next week. There are petty cuts that will not save significant amounts of money but that will hurt small numbers of people. These decisions could easily be rectified within the figures. I have some experience of this; the one thing I tried to avoid last year was making deep cuts on individuals. If people suddenly find a few hundred euro disappearing from their weekly income and they are of modest means, it could be the tipping point for them.
One of the problems with the way thing were done last Monday was that a lot of the micro-information was not made available. For example, under the heading of “Other Measures”, some €20 million has been provided. This refers to administrative budgets, means-testing rationalisation, treatment benefit and other miscellaneous measures. In some cases the bread will literally be taken from the mouths of ordinary people. I want to put this matter in context. The Department of Social Protection spends approximately €100 million a day. I understand it makes payments during a ten hour period. Therefore, this amounts to the equivalent of a two hour payment in the whole year. That is what we are arguing about in the case of some of these meaningless measures which include home care and carer’s allowance.
The Minister of State could save himself a lot of trouble if he were to spent the weekend studying the data. Unlike last year, there are no great time pressures. We all know the circumstances that prevailed this time last year. As I have no doubt the Minister of State hopes to be in office for five years, time is on his side. He should, therefore, take time out this weekend to examine some of the harsher measures that might not save €1 million a year. It amounts to margin-of-error stuff in the Department of Social Protection. He should examine these measures and seek to have the Bill changed accordingly. If we proceed to meet an arbitrary deadline of 3.30 p.m. today, the Government will always be remembered as the one which seemed to go after families, women in particular. It chose the better-off ahead of the less well-off.
I have the height of respect for the Minister of State, and we all serve the interests of the people. Unlike what happened when we were in government, I will never say that any significant amount of people in this House have anything other than the good of the ordinary people at heart. I have always objected to the allegation that we were acting for some big vested interest; the Minister of State knows this was not true and I know it is not true in the case of the current Government.
Whether it is naïveté or purposeful policy, the Government made some strange decisions. I will outline one which shows a philosophy that I find strange as an ex-Minister. We can take the fuel allowance as it applies to pensioners. That allowance is paid to those on a non-contributory pension, with an allowance of €100 per week.
Deputy Éamon Ó Cuív: There is a very clear ceiling and a person would be in a household that does not have rich people as they are all excluded. This is a household payment to people we are certain have limited income. As I noted, the limit is the contributory pension plus €100 per week. The Government cut that specific group by 19% with regard to fuel and electricity allowance. On the other hand, all the pensioners over the limit of the contributory pension plus €100, or, by definition, on a non-contributory pension, will not see any cut at all. What inverted logic allows this to be equitable? I know pensioners with incomes of €50,000, €60,000 and €70,000 per year, from contributory widows’ pensions for example, and they are not affected at all by this.
I remember the debate on the Social Welfare Bill last year, when I was in the Minister of State’s seat. I said to Department of Finance officials that the fuel allowance should be increased, if anything, as it is a very efficient payment. We can forget about it being for fuel as it is a supplementary cash payment to poor houses. I told the officials they had missed the point. If I had €100 million to give out, I would not put it in a general rise in pensions, as that would increase the pension of people who are already well-off, I would put it into the fuel allowance instead because I would be guaranteed the money would go to houses with long-term unemployed or people with disabilities. We would know those households would be in relative poverty compared to the rest of society.
In considering the issue this way, one can decide if it was clever to avoid hitting the middle and upper classes, who do most of the shouting. They have perpetuated the urban myth that taking medical cards from millionaires was in some way cruel when young families on tight incomes cannot get it. There is a perfect example in farming circles, as the big farmers march the small farmers to Dublin to do the deal for big farmers, leaving smaller farmers ar a bharraí géar With medical cards, the rich people frightened the poorer people by saying they would lose the medical card, which they would not, and managed to save their cards. We correctly took out the top 5%. How can it be justified to have people on €100,000 per year having a medical card in straitened circumstances?
The philosophy of the budget seems quite clever but very flawed. Instead of taking a little from a lot, which might have annoyed many people but would have been equitable as wealthier people on social welfare would have taken a hit, the Government has focused on taking a lot from a little. In going that route, as I could have foretold, the most vulnerable people must be hit. We can see what has been done.
We can take the effects on women, particularly vulnerable women, as an example. Women with big families get hit through child benefit decreases but women with small families do not get hit at all. We all know that the more children a family has, the more difficult it is on a fixed income. Child benefit does not pay the cost of rearing a child. The Government reduced the entitlement to lone parents over the next few years to when the youngest child turns seven, which the Government parties opposed completely when in opposition. We had a debate on this as there was an initial proposal for the age to be 13 and I put it back to 14. The kids in secondary school are somewhat independent and when they come home from school in the evening, they are mobile and can stay in a neighbour’s house, for example. I fully bought the argument that a child of seven or eight cannot be given a key or told to go to a neighbour’s house. There are exceptional costs for a lone parent, and the idea of forcing them to the live register when we cannot get jobs for those already on the register is just a way of saving money.
There has been a cut of €29.80 for those on the community employment schemes, with a three or five year slide as well. The earnings disregard over five years is being reduced from €146 to €60. Over three years there is a stipulation that a person cannot be on community employment schemes and get either disability payment or a lone parent payment. Some 90% of single parent families are women.
There is a very mean anti-women provision in the small print. I do not have the details of the figures. The Government has stipulated that anybody who does not have an average of 48 contributions per year will have a very reduced pension compared to the current benefit. Currently, a person loses a few euro if there are between 20 and 48 contributions. Why is that anti-women? Women are the predominant group who start employment, work for five or ten years, leave employment and go back at a later stage. If a woman did not work to begin with she would be okay, even if she only did ten years at the end. The Minister of State knows from people in his clinic that when there is such a break, the average contribution is reduced. Women are mostly caught this way. What is the focus on getting women in this way?
Women may leave employment because of the norms of society, with some having had to leave because of the marriage bar. Women are also hit with regard to the contributory widows’ pension. Instead of needing stamps for three years, the stipulation is now ten years. As a result, young widows with low incomes will be left in a vulnerable position.
On the Order of Business I read out an e-mail from a lady who may be down €330 with her family income supplement, and she is one of the lucky ones. Anybody on that payment is not living the high life. She is a carer and in many cases these people are caring for people 24 hours a day. We took the view when in government that caring is not a social welfare payment but a payment for hard work. It is not received when a person does nothing. There is the idea of helping the neighbour, cabhair le gcomharsa. The means test disregard for that is being eliminated. I know there are logical reasons, which were put to me when I worked with the Department, and some have interesting historical origins. At a time of extra pressure on people, we are targeting small groups and taking much from them cumulatively.
I am broken-hearted for the people who will lose hundreds of euro in this budget. I know the backbenchers are interested in the good of people, which I would not take from fellow politicians. They are also interested in their seats.
There is nothing wrong with that either because one cannot change anything if one is not in the House. They would much prefer the Government to take time out to change, in particular, the minor provisions which will not save significant amounts of money. I know this from being in the Department. The Government should take time out over the weekend, rethink the approach and come back next week with a revised Bill that would be fairer and spread the load more equitably. In particular, the cuts should not all be loaded on the most vulnerable. I could give examples all day of where we seem to be targeting all those who are means tested, while those who are on social welfare and have other private means seem to be getting away scot free. It is not fair or equitable.
Deputy Éamon Ó Cuív: I explained the approach I took when I was in the Cabinet. If the Minister of State does what I suggest, I will be the first to say one of the greatest abilities in life is to accept one got something wrong and that one is going to put it right. It would be to the considerable credit of the Government if it were to accept it has made mistakes, that it did not think things through properly or consider the cumulative effects of all the cuts and we were to come back next week. The Minister of State would be able to go home for Christmas with a clear conscience because he had done the right thing by the nation.
I welcome the opportunity to contribute to the debate. It is always difficult for a Government Deputy to defend cuts in a budget, but we are living in extraordinary times after years of disastrous decisions made by the previous Government. I accept this was a tough budget. We would all have preferred not to have to make such decisions, but the reality is that we have no choice. We inherited an €18 billion euro deficit which we have to fill. The Minister for Finance, Deputy Michael Noonan, said on Tuesday:
The Government has made a very good start. As Chairman of the Joint Committee on Foreign Affairs and Trade, I know from speaking to colleagues in other countries that we have restored our reputation abroad. People are no longer talking about this country in negative terms. They are speaking about how we have restored credibility to the country in the short time we have been in government. Even the international press speak about us in a favourable manner, unlike the way we were portrayed in the past two years.
Abraham Lincoln said, “You cannot escape the responsibility of tomorrow by evading it today.” We have a responsibility to the country to make the hard decisions now in order that we can bring it back from the brink. We want to do this in a fair way. We also want to be open and transparent with the people, as has been the case in the past six months since we came to power. Given the difficult circumstances in which we find ourselves, the budget has been fair. To close the €18 billion gap, we had to make choices. There was no easy way out. The Government’s priority was to protect the most vulnerable, create jobs, streamline the public service and, most of all, protect people’s pay packets. We must regain control of our fiscal and economic policies in order that the economy can grow again. That is the reason, even in these most difficult of circumstances, it is welcome that we have managed to deliver on the programme for Government commitments to maintain core social welfare rates, the current rates of income tax, introduce schemes such as the partial credit guarantee scheme and provide for the construction of a €100 million micro-finance start-up fund for small businesses. It has gone over many people’s heads that the Government has reversed the decision by the previous Administration to reduce the minimum wage. In the budget we have eased the burden further on lower income workers by ensuring 330,000 people earning less than €10,000 will no longer have to pay the universal social charge. This has been welcomed by many low income families, trade unions and the farming organisations.
In spite of the difficult choices to be made, I remind Deputies on the Opposition benches that the previous Government proposed to slash the social protection budget by an additional €665 million next year. The Government has managed to limit the adjustment to €475 million. Perhaps some Opposition Members might explain to the House who was to pay the price for the additional cuts of €190 million proposed in Fianna Fáil’s four year plan.
The Government will spend €20.5 billion on social protection measures in 2012, a sizable amount even in current circumstances. I welcome the comments of the Minister for Social Protection in the House yesterday on disability allowance payments for young people. I understand the intention was not to reduce their benefits and welcome the fact that the issue is being revisited. Backbenchers played an important role in that regard. The issue will be dealt with before March.
When the dust settles after a budget is announced, there are always queries about a number of proposals. When I was in opposition, it was always the case that there were queries. It is worth talking about genuine concerns, but there has also been much hysteria, in particular from the Opposition, such as the scaremongering that took place before the budget.
Deputy Pat Breen: Councillors in County Clare spoke about barracks and Garda stations being closed, but that did not happen. They named particular examples, but they were not correct. I accept that some Garda stations are closed, but many of them were closed previously.
I welcome the Minister, Deputy Burton’s comments yesterday in recognition of the valued contribution which community employment schemes made to communities across the country. The Minister is correct, the schemes play a valuable role. They often provide services, particularly in rural areas, which would not otherwise be provided. Every parish has a community employment scheme which plays a valuable role. That is true of my constituency in which they underpin the provision of many essential community services. For example, the family resource network provides family supports, information and advice at local level in the four corners of County Clare, in Kilrush, Ennistymon, Killaloe and Shannon. Community employment schemes also have an important role to play and do much good work in GAA and Tidy Towns organisations. Numerous Tidy Towns organisations sponsor such schemes, without which the achievements in restoring pride of place in their communities would not be possible. In some areas, the schemes have facilitated schools to employ secretaries such as in my local school at Ballynacally. On local radio yesterday, I heard Mr. Brian Higgins of the Irish Congress of Trade Unions say that many of the schemes will collapse if material and training grants are reduced.
The proposed changes are designed to reform one element of the funding of CE schemes. There is no intention to axe the schemes. The Minister is undertaking a value for money analysis of the schemes. It would be helpful if the Minister would comment on this when she replies to the debate today, so as to draw a line under the scaremongering that is taking place. I ask the Minister to clarify that matter.
I could have spoken on other issues, particularly the employer’s rebate on redundancy payment which could put pressure on the Department of Social Protection and which could be looked at again, but time has beaten me. I am delighted to have had an opportunity to contribute to the debate.
Deputy Catherine Byrne: I welcome this opportunity to speak on this very important Bill. I also express my concern to the Minister. I have already spoken to her in this regard. She has listened with great interest and I hope some of the issues that have been raised by Deputies will be considered over the next couple of days.
In the past few days, I have listened to the name calling, insults and mud slinging from the Opposition. I listened in disgust to the unfair comments regarding the Minister for Social Protection, Deputy Joan Burton made yesterday by one of my constituency colleagues in Dublin South Central. I cannot understand his reasons.
Deputy Catherine Byrne: I was pleased to hear from one of the Fianna Fáil Deputies yesterday that his party could share part of the responsibility for the state of the country. I remind all those members of the previous Government who are still in the House that they are totally responsible for the fact that our small country is on its knees. For the past 15 years, Fianna Fáil-led Governments used money to win elections. They threw money away as if there were no tomorrow and created a massive property bubble. This was not their own money. It was borrowed. That is why we are now €18 billion in debt. We are left in a very dark place, with a massive budget deficit and a lower tax intake. We know the country is in a difficult economic position and no one in the House wants to cut people’s entitlements. Unfortunately, due to the reckless spending of the past number of years, we are left with very few choices. As a Member of one of the Government parties, I take full responsibility for the budget that is being debated today.
In the past couple of days, I have listened to Members of the Opposition speak about our European Union membership. Our membership of the European Union, for which the Irish people voted, has had a positive impact. We have made huge gains as a result of our membership. The EU has funded schools, roads, farms and community projects across the country. Funding from Europe has enabled people in our communities to help run community employment schemes, breakfast clubs, after-school projects, higher education and other resources. More than ever, in these challenging times, we need the help of our European partners to sustain many of these projects. As an EU member state, we were able to ask for help with our financial crisis. The European Central Bank and the International Monetary Fund bailed us out and brought the country back from the brink of bankruptcy. We are now obliged to pay back our debts. This applies to all of us, or to anyone who has taken out a loan.
Last February, the Government was given a mandate by the Irish people. It took on the responsibility of rebuilding Ireland and reviving our economy. No one denies that lifestyles will have to change and we all have that ahead of us in the coming months. There will be changes across the spectrum. The Minister for Social Protection faces a bill of nearly €20.5 billion this year. Savings have to be found and difficult decisions have to be taken. Some people will receive less money from the State than in previous times. The reduction in some social welfare schemes is unpopular and I commend the Minister on leaving the majority of payments intact. The budget is as fair as it can be, given the state of our public finances.
I have met many people in my constituency who have worked hard and paid taxes. They have been distraught to see some people who are not working and in receipt of social welfare payments earning the same amount of money as they do, having got out of bed in the morning and gone to work. That is where fairness comes into play. Those who have contributed to the State must be helped and supported when they lose their jobs. We must also support those who cannot work, especially those who have lost their jobs through no fault of their own.
We cannot, and I will not, condemn all those earning high wages. Many of these people have studied hard, progressed their careers and carry great responsibility in their jobs. As a parent who has young children still in school and college, I would like to believe that some day, after their hard work and study, they may become some of the high earners and will not be condemned for holding those positions.
I welcome the Minister’s decision to review the changes to the disability allowance. She has listened, not only to comments from Deputies on the Government side but also to those of Opposition Deputies and of families with children who have severe disabilities and rely on disability allowance. It is important to support these families.
Earlier, Deputy Ó Cuív referred to getting things wrong. Many things were got wrong in the past number of years. He told us we should go home and clear our consciences. I have a clear conscience and I will face into the Christmas season with a clear conscience. There is only one person to whom I need to confess, and that person is not in this Chamber or on this earth.
We live in difficult times and in a difficult world where greed has destroyed many people’s lives, families and countries. People need hope and new direction. That is why the Government must face these tough and challenging times, and not shirk our responsibilities. Otherwise, we will be back in the place where we have been for the past number of years.
I wish circumstances were different. I come from a community where I have worked since I was very young, first as a volunteer and now as a public representative. I know the needs of many of the people in my community. I do not need to be reminded. Unfortunately, for me and for many people, particularly those in public life, times have changed. I wish I was standing here saying something different about a budget I believe has flaws. However, as a Member who wants to make changes for the people in my constituency, for my children’s future and for my grandchild, I believe this is one of the steps we must take to correct what has happened in the past. I will not be drawn into mud-slinging in this Chamber because that is not what this budget is about. We live in a time of serious challenge and I am prepared, as a Member of the Government side of the House, to take on those challenges and to help bring about change and a better future for everybody in the country.
Deputy John Halligan: Significant numbers of the electorate voted primarily on two issues in the last election — honesty and fairness — and this was acknowledged by the current Government parties when in Opposition. People believed the last Government to have been dishonest in its dealings with them. They were told the economy was on a sound footing, when it was collapsing all around us, that the IMF was not coming into the country, when they arrived the next day, and so on. On the issue of fairness, there is a decency in Irish people and they came to the view that they would have to make some sacrifices and they did that. However, as they made those sacrifices, they watched bankers, developers, speculators who were creaming off society go untouched. Therefore, they voted out the last Government on these two issues.
Deputy John Halligan: In the minds of the majority, the volume of election promises have not been kept. Where then is the honesty? They still see the banks and speculators sticking their two fingers up at society and walking away scot free. They see the rich becoming richer, as the statistics prove, but what about the poor? Some 650,000 people are on the poverty line, 210,000 of whom are children. These are the statistics provided by the Government, which it received from Social Justice Ireland a few weeks ago. However, the Government did not have the decency to get back to Social Justice Ireland on its budget submission.
Deputy John Halligan: People ask where the fairness exists when 140,000 families with from three to four children, some of them the most vulnerable families in the country, are deducted much needed money. It is embarrassing to hear the Minister defend this rather than sit quietly and look ashamed. It is embarrassing to society that the Minister defends cutting payments to 140,000 of our most vulnerable people.
Deputy John Halligan: I met a chap during the election who said he had become politically motivated, in the sense that he could not wait to vote because he wanted to vote Fianna Fáil out. However, when I speak to him now, he thinks he may have been in a time warp or have been beamed up off the planet over the past seven months, as he feels as if he did not vote at all. He is back to stage one again and saying he cannot wait to vote again. What is he going to do this time? He is going to vote this lot out in the next election, which is what will happen.
I wish to refer to the community employment schemes. These schemes are hugely advantageous to communities throughout the country and in every town, village and city. They are now at risk and many of them have collapsed because of the cuts, from €1,500 to €500 for the materials, maintenance and training grants. These schemes support disability services, meals on wheels, child care services, tidy towns and sports centres all over the country. The Minister must reverse these cuts. She should equally reverse the cuts to lone parents, widows and widowers and recipients of disability allowance who participate in those schemes. They will see huge cuts in their income as a result of this budget.
Deputy Finian McGrath: I am grateful for the opportunity to speak on this Bill. Before I go into the details of the legislation, I wish to say that I find it hard to believe that in the current economic climate and with this current budget we have a Minister called the Minister for Social Protection. Think about it. Ask the poor, the sick, senior citizens or the disabled where there is any protection from these cuts. Ask those working in community employment where there is any social protection from the 66.6% cut in their funding. Let us be realistic, straight and honest with the people. How can cutting fuel allowance be a social protection for our senior citizens? The Minister must see the point. This is not on. It is shameful and a disgrace.
Today, at 2 p.m. we will have the representatives of 22,474 people on community employment schemes at the gates of Leinster House. I will support them strongly and I urge all Members with backbone to go out and meet these people. They have taken a cut of 66% in their funding and that is the truth. I challenged the Tánaiste on the way he responded to some of these questions this morning. As well as sticking it into the disabled and senior citizens with the fuel allowance, the Government is now sticking into the people on community employment schemes, which provide services for the disabled and poor people.
It is a pity Deputy Byrne is no longer here. I say to her and to the Government that they must get off the high moral ground with regard to talking about taking tough decisions. That side of the House was in opposition last time around and the ranting and raving that used to go on over on this side then was mind blowing. They should not come along now and defend the situation.
It is time for this Government to get off the stage and to look objectively at the facts with regard to this budget. The ESRI, a non-political body, examined the budget closely and it stated that its examination of the impact of cuts and taxes shows that the better-off took the smallest hit. Look at the impact of the 2012 budget. It is clear that the greatest reduction in income is for those on the lowest incomes, a fall of from 2% to 2.5% for the poorest 40% of households. This compares with the fall of close to 1% for the next 40% and there is a 0.8% fall for the top 20%. In other words, even those who speak objectively say the Government has cut the weakest sections of society the most. It should be ashamed of itself.
I received a letter this morning from the principal of a disadvantaged school on the north side of Dublin who pointed out the real world for him. First, some 250 teachers in disadvantaged primary schools are to be transferred out to solve the increased pupil levels nationally. In other words, in his school, the pupil teacher ratio of 15:1 has gone to 22:1 and the principal’s non-teaching post has been lost. The learning support system has been changed. The support teacher scheme is no longer in place, as confirmed by the Department. As a result of the cuts, the number of staff is down to 4.4. This is a very disadvantaged school on the northside of Dublin. Those in government who talk about protecting the vulnerable and the weak in society conned the people when in opposition and they are conning them again in government.
I urge the Minister not to take carer’s allowance into account in assessing social welfare applications or government services. Carers are also being attacked. I urge the Government to change its mind because we will fight this decision to the very end.
Deputy Stephen S. Donnelly: We must see the Bill in the context of the overall deficit adjustment required. We all know it is impossible to make a €3.8 billion adjustment without causing some pain. Many have said there will have to be more. I read some of the analyses yesterday which stated ours was the lowest adjustment in the five eurozone countries in distress. Our growth projections are now so low that it is probable we will miss our growth and deficit targets and that the Government will be back to introduce a supplementary budget some time in 2012.
There are elements in the budget which I welcome. Moving towards shared services is a great idea, as is placing the focus on the use of generic drugs. Moving to consolidated procurement practices is also welcome. However, these things are difficult to do, as they are complex. I wish the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, and his team all the best and hope they can extract as much effectiveness from this as possible.
I welcome the widening of the universal social charge band in the Bill. The readjustment of child benefit payments is reasonable within the current context. The focus on reducing fraud in the welfare system is long overdue. It is welcome that current social welfare bands will be maintained, which is very significant, although I do not believe the Government will be able to maintain this further than perhaps the next 12 months.
I also congratulate the Minister for Social Protection on her roll-back on the disability issue. I refute the media commentary that this is, in some way, politically embarrassing. We must allow Ministers and fellow Members to make mistakes and to listen to the people, their party members and members of the Opposition.
The Bill and the budget in their totality need to meet two conditions. They need to be fair and effective. It is reasonable to assert that they are unfair, as we know, mathematically, this is a regressive budget. The sums have been done and we have seen the reports and know it hits the poorest the hardest and that it directly targets lone parents, small business owners, students and participants in community employment schemes. Until recently, it targeted people with disabilities. However, those at the top will remain relatively untouched.
The Bill is also regressive. By any reasonable definition in a western democracy, it is unfair. The only rationale for introducing something we would all agree was unfair is if it would be incredibly effective and make the county less equal, that we would create a large number of jobs and, therefore, everyone would benefit in the long run. The theory the Government has stated it is using is that if one is trying to create jobs, one does not tax labour, rather one taxes consumption. In a normal economy and in normal times, that is true, but in this economy and at this time it is not. The Government is applying incorrectly basic economic theory to a complex issue. I know it is trying to create jobs, but this application of economic theory will achieve exactly the opposite.
VAT is being increased by 2%. We know that small businesses will close down as a result. The Government’s own logic for its jobs initiative is that by reducing VAT jobs will be created. If we look broadly at the figures the Government has suggested for its jobs initiative, increasing the VAT rate will probably put tens of thousands out of work. It will cost hundreds of millions of euro in social welfare and result in a lack of returns to the Exchequer. We know it will drive people over the Border.
There are issues around the employers redundancy rebate. We know this decision will accelerate redundancies as employers try to get them through before the budget measures take effect. Pension contributions for employers are also being increased. The Government is passing a massive bill from the State to small business owners. It has not been able to differentiate between large multinationals which can afford redundancy payments and small businesses which simply cannot afford to do so. People have contacted my office — I am sure other Deputies have been contacted, too — to say they run a small business in Wicklow or some other location and that they will now have to put one to five people out of work. That is happening. The economic theory the Government is applying will achieve exactly the opposite of what it is trying to do, which is to create jobs.
We need further analysis. There has been no analysis of the impact on poverty which I believe the Minister is legally obliged to provide. The level of analysis on the issue of VAT is ridiculous. The Government is counting on having €670 million in additional revenue, but it assumes there will be no drop in consumption. There will probably be a drop to the tune of more than €150 million. The Government assumes there will be no redundancies, but there will. We have not seen any regulatory impact or gender impact analysis. These are critical in establishing which are the most and the less harmful provisions and I would like to see them.
I have absolutely no doubt my contribution will not change a single line in the budget or the Social Welfare Bill, but when the Minister for Finance and his colleagues are coming up with a supplementary budget and considering policy for next year, I ask them to, at least, consider that the application of the economic theory being used will achieve the exact opposite of what it is they want to achieve.
Deputy Mattie McGrath: I am delighted to have the opportunity to speak to the Bill. Following on from what previous speakers said, this is a totally regressive budget which will drive jobs out of the country. There is nothing more certain than this.
I refer to small businesses. The whopping 45% cut in the redundancy payments rebate is unbelievable. I have been in that position and availed of the scheme when things got slack.  The Minister is right to go after the large multinationals which run off after they have availed of the tax exemptions. However, this measure will prove detrimental to small businesses.
The fuel allowance is to be cut by €120. How does the Minister expect elderly people or anybody else for that matter in receipt of fuel allowance to manage? Are we going to have sunshine after all the doom and gloom? Are we going to have shorter winters? This is despicable.
I listened to the Minister speak after the announcement of last year’s budget and for four years at the committee and there has been a turnaround. On what planet has she been put? Fine Gael put her in this position. It made sure she was given the Department of Social Protection to silence her. Not only has she become silent, she has also become invisible. I have been in the Chamber for most of the morning and she has not appeared.
I compliment the Minister on reversing the cut to disability allowance. The former Minister for finance, the late Brian Lenihan, took the measure out of a budget, but someone in the Department did not shred it and the Minister put it back in. The Government would have gone ahead with it if it had not experienced the wrath of the public.
As Deputy Donnelly said, the Minister will be back with a supplementary budget because this one will not work. Because of the extra 2% in VAT, people will not be able to spend and small businesses will shed jobs rather than take people off the dole.
There has been a cut made in respect of community employment schemes. I am the chairperson of a community employment scheme in my locality and this cut is disastrous. We will not be able to put in place progressive training schemes. I could quote the figures for costs, but I will not go into them because the Minister knows what they are. Some 5,000 people will be in debt even before the scheme starts next year.
The cuts are regressive. I do not know where the rural and urban Deputies were when they were supposed to be discussing the fairness and reasonableness of the budget. Fairness went out the window when the Government looked after the big people and forgot the small people, as did previous Governments. Fine Gael is present, but where is the Labour Party?
Deputy Mattie McGrath: Three of its Members have gone overboard already and more will go. Get the life raft fast. Fine Gael has lost one Deputy and more will go. The budget is despicable. Shame on the Government. The Minister of State can laugh if he likes, but his laugh will be on the other side of his face when he returns to Meath East.
Deputy Mattie McGrath: Fine Gael has broken more promises than there are pieces of glass when a pane of glass falls off the roof. Everything is shattered and Fine Gael should be ashamed of itself for doing this to ordinary people. I cannot believe its Members have consciences or can sleep.
Deputy Mattie McGrath: I have nearly said enough. I thank the Acting Chairman for being so fair. He is honest and is welcome on this side of the House any time. He is on his way over. He was given time yesterday from the speaking slots of Sinn Féin and the Technical Group. The Acting Chairman is a gentleman who understands economics whereas the Government knows nothing of the subject. It is in a cavern and cannot see the wood for the trees.
Deputy Frank Feighan: I welcome the opportunity to contribute on the Social Welfare Bill. As politicians, we have a duty to put the right arguments. Unfortunately, the media is interested in spin and worst case scenarios. The Government has taken over a difficult situation, in that the country is bust. The Government has a majority and a job to do. We must be fair, upfront and honest.
Deputy Frank Feighan: ——not allow it to remain open. I have stayed in government to ensure patient safety and the hospital’s future. All I ask is that, in a year’s time, people driving by the hospital will recognise what happened.
I appreciate Deputy Donnelly’s comments, in that, if a mistake is made, one should put one’s hands up and row back. This is not a question of admitting defeat, but of doing the right thing. Through the Social Welfare Bill, we are trying to do the right thing, including returning people to work. I do not agree with some of its provisions, but we must do the right thing.
An Independent colleague has castigated me for nine months and called me a liar, which is a word that cannot be used in the Chamber, a traitor and a coward. Everything I have done in that time I have done in the interests of the people of my constituency. In terms of turf cutting, I stated that I would write my name in blood. We have since delivered for turf cutters. Hundreds, if not thousands, of them will get €1,000 per year for the next 15 years thanks to the agreement we signed.
Deputy Frank Feighan: The majority of people are delighted and are voting with their feet. Sometimes, people such as Deputy Mattie McGrath should consider what is right instead of putting the fear of God into people.
Deputy Frank Feighan: When the country became banjaxed four years ago, I decided to take a voluntary pay reduction, which I have maintained. My constituency colleague told everyone that he would take a 50% pay cut, but I do not know whether he did. We will know at the end of this year. The Government will wear the green jersey.
Deputy Stephen S. Donnelly: And we are calling for it to be vouched. Which part of that sentence does the Deputy not understand? What is his problem? He and his colleagues get three times more money than we do.
Deputy Frank Feighan: The situation is a difficult one and we have a job to do. I hope the Bill’s provisions are fair. I do not agree with some of its measures. In four years time, we will say “Goodbye” to the IMF at Dublin Airport and the country will be economically sovereign again. I will support the Bill. The new poor and those who cannot afford to pay must be protected. This situation evolved because of light touch regulation and bankers have got away scot free.
Deputy Michelle Mulherin: This is my first budget and the imbalance in the debate is striking. The reality is that next year we will spend €20.5 billion on social welfare and there is never any talk about where it comes from except for these dreadful rich people from whom we must take money because they are the bane of society and we all want to be so equal. The way people protest around here is disingenuous because it gives the impression there are those for people and those against them. If we look at the circumstances of the people making those speeches, they are on the same wages as those on this side of the House, aside from the technicalities of the points being debated there.
The idea people are holding hands with the poor is disingenuous. There should be always a debate about social welfare, about where it goes and from where the money to pay for it comes. A lot of what I have heard in the debate is the peddling of misery, scaring people while not having a conversation about what people are entitled to and who pays for it. Often in these debates, we hear something is being taken away but who is paying for it? Most of the time it is the taxpayer but at the moment the IMF is making up the shortfall. These people are not fantastically rich but have worked and worked. There are many of them who feel the social welfare system has been operating in an insane fashion over the years and that it has been open to abuse and exploitation, driving people away from working.
That does not solve the issue of those who really need help. A good social welfare state is a safety net we all might need at some point, we do not know. It seems as though it is unchallenged, that begrudgery, which privately people might consider an Irish trait, is being glorified, particularly begrudgery of the wealthy, whether they inherited their wealth or earned it, or whether they are entrepreneurs or the innovative, the sort of people we would like to think could be confident that they have a place in the country, that they are not being demonised because of their wealth, that they will invest in the country and will not move assets out of it because this is a country where the politicians hold hands with the poor. That is a joke because the poor are not fooled into thinking politicians are holding their hands. We do our best by people but we must have debate not just about their rights, but about their responsibilities to the nation as a citizen.
As the Bill is drafted, the redundancy provision that cuts back from 60% to 15% is a crude instrument. That would mean employers would have to pay 85% of the redundancy. Small, family run businesses have been trading for years and want to hold on until there is an upturn and many of them have been operating without taking any earnings out of the business. They want to hold on to their employees because they have faith in the country that it will lift. Now, their decision is being tilted by the fact that if things do not work out for them and they go to the wall, they must ask how they will meet the payment to employees who have been loyal to them. It is all very well for a multinational or an incorporated entity that can hide behind the corporate veil if it goes insolvent but there should be special provision for the sole trader and for the small business because this is significant for them and thousands of jobs could be lost even as we speak while people weigh up their options on account of this new development. These people do not want to be told to send their employees to the insolvency fund; they want to trade their way out and want to see brighter days but they are being forced to make tough decisions.
Some people claim that if they bring in this quickly, they will not be able to serve redundancy papers but that is a cynical position to put genuine people into when they will not be able to carry the 85% payment. Will they have to remortgage? In many small businesses, the home is the collateral security for debts. Why are we putting these people in this situation to tackle a problem that is higher up the line where we have multinationals who leave the country and we have to pay the redundancy for their staff?
This measure will push employers into letting go employees. Why would I keep an employee for 15 years and incur this burden? I would keep turning over my employees. That is not what we want, we want employees to be treated fairly and employers to have confidence in their employees. This development at a time when businesses are holding on by their fingernails is not welcome and should be looked at to protect the unincorporated small business and sole trader. They do not have the protection of the corporate veil, which in our capitalist society has been highly abused. We see reckless developers who are still fine and who still have their homes because they are protected by the corporate veil while subcontractors who were not protected and who offered personal guarantees to keep businesses operating have gone to the wall. The corporate veil has been abused and I would like to see this classification of person protected and given hope because they are staying in business. They are not getting start up money so they should be given some encouragement.
I made my inquiries in my area and it is very well served by CE schemes, such as the Tidy Towns and the local arts centre. My understanding is that the cut in the materials allowances will have little impact on clerical schemes in offices but in environmental schemes where people need shovels and coats, such as Tidy Towns, and health and safety courses, money is needed. I would welcome a provision whereby there is discretion and organisations that do not need the money do not get it, and those CE schemes that need money get it.
The stopping of double payments will impact on lone parents. For lone parents, a CE scheme is an ideal option. It gives the flexibility to still care for children while an extra income comes in. The problem here for lone parents is child care. I was talking to a French woman who lives here and she told me that in France she would pay €5 a day for child care but she pays €50 a day for a child minder here and she must work. Child care is one of the biggest burdens lone parents must face when finding work. The CE scheme worked well for lone parents but the cancelling of the double payment points to a problem with child care. It is unsatisfactory. We are talking about women and children because normally women are caring for the children and they will be worst affected. We must address the issue, particularly if we want to encourage people to work. It cannot be so prohibitive that people work to pay for child care.
There are many cases where women must pursue the fathers of their children, irrespective of whether they are married to them, for maintenance. There is a general view the State will look after them. Clearly this is not the way to go; there should be a centralised service to pursue these people. In many cases there is money for everything but there is no money to look after the children when the children should be always the priority.
Hand in hand with asking fathers, whether married or unmarried, working or not working, to take on responsibility for their children is also recognising the relationship a child has with his or her father and if possible should have with his or her father. Regardless of who he is or what his background is, this is a right of a child. There has been much talk about the role of fathers but nothing has been done about it. We do a grave injustice to the men of our country and the children of our country. I would like to see considerable reform in that area.
Acting Chairman (Deputy Peter Mathews): I call Deputy McConalogue who is sharing time with Deputy Healy-Rae. As the Minister must reply at 1.15 p.m., the Deputies have approximately seven minutes each.
Deputy Charlie McConalogue: I am grateful for the opportunity to speak on the Social Welfare Bill. As a first-time Deputy I find it strange that so little time is being given to debate the Bill. I know this is not unusual for such a Bill after the budget, but it is a poor reflection on our national Parliament that we drive a Bill with measures that have such an important effect on people through the system as quickly as we are doing today. For all the talk about reforming the process for introducing and dealing with budgetary proposals, to treat the Social Welfare Bill in this way is out of kilter with the rhetoric on reform of the budgetary system. Pushing the Bill through today reflects that it contains very tough measures and the Government wants it enacted as quickly as possible so people do not get time to digest its contents and therefore to come back to lobby Government and backbenchers for change.
Many of the measures are regressive. I watched the Minister of State, Deputy Brian Hayes, on Vincent Browne’s television programme during the week. He was asked to outline how he would be affected by the budget and the only measure he could point to was that he would have to pay 2% more in the standard rate of VAT just as everybody else will. This is a reflection of how regressive the budget is. Anyone in this Chamber is on a very generous salary by comparison with any normal person. If any of us were to ask how these budgetary measures are affecting us or anybody else in a well paid job, we would struggle to find anything apart from measures that are also affecting people on much lower wages or dependent on social welfare. A family on social welfare with three children may be losing €1,300. For them to be affected by this budget to the same extent as a family with an income of €150,000 shows how regressive it is. I find it hard to understand how the Labour Party can stand over a budget that has such an impact on people.
I would like to address a few measures that have not had as much airing as they should have. I highlight the proposed changes to widows’ and widowers’ pensions. The Minister is increasing the number of PRSI contributions in order that a widow or widower can receive the contributory pension from 150 payments to what amounts to ten years.
Deputy Joan Burton: No. It is being increased by two years in line with the increase in the age of the State pension to bring it from three to five years. There was an error in the Bill and the correction is reflected in the amendments.
Deputy Charlie McConalogue: I have that already. It is a very sneaky cut because that is a constituency that has not formed yet, in that no one expects to become a widow or widower and therefore there is no lobby to oppose this measure as it only affects new entrants as widows or widowers.
Deputy Charlie McConalogue: ——who cannot defend themselves because it is a lobby that has not formed yet as it comprises future widows and widowers. I find it regrettable that she should attempt to target that.
The Government has targeted the redundancy rebate scheme. In selling and marketing this change, the focus has been on TalkTalk whenever headlines have been generated on the matter. Unfortunately most businesses that are laying off people at the moment are doing so because they are on the breadline and are trying to keep their businesses operating. Reducing the State rebate from 60% to 15% could be the death-knell for many of those companies that are already struggling to stay in business. The Government needs to revisit this and find a way whereby companies in that situation can apply and continue to get the level of rebate they would have in the past.
Deputy Michael Healy-Rae: I thank Deputy McConalogue and Fianna Fáil for sharing time. Twelve months ago the Minister was on this side of the House berating the then Government and the people who supported it. She called them everything under the sun and went out onto the plinth and said they were treating people in a disgraceful manner. What they were doing at that time was nothing in comparison with what the Government is doing now. When she came into her position she was sour because she did not get the Department she wanted. The first thing she did was to get her new title — the Minister for lifestyle choice.
Deputy Michael Healy-Rae: What manners has the Minister with the misery she will inflict on the people? I will have my say. I say to the Minister for lifestyle choice that I do not know anybody who is on welfare because he or she wants to be on welfare. The people I know and represent want to work. They want to get up in the morning, put on their shoes and go out to do an honest day’s work for an honest day’s pay. If they cannot get work, they are entitled to seek whatever they are entitled to. The Minister is making it impossible for families to manage. This is the budget the Government claimed it did not want to bring in. Now that it has brought it in, it is much more draconian and harder on poor people. They are the people affected by this budget. Hundreds of poor working families face cuts of up to €120 per week based on the measures buried in the small print of the budget. The hidden move will see cuts to family income supplement for those also in receipt of the carer’s allowance. I would like to read into the record a letter I received from a poor family, although I am sure the Minister does not want to hear it. Poor families will be affected by what will be passed here today. As stated by Deputy McConalogue, this legislation is being rushed through the House today because the Government does not want people to know what is happening. The Government is rushing it through so that it will be in place before the people know what hit them.
Deputy Michael Healy-Rae: At least the Government got some value out of them. They glossed up this budget in such a way that the people did not think it was bad. It will not be until later today, tomorrow or having read the Sunday newspapers that people will realise what has been done. People will then realise their entitlements have been changed. These cuts will have a savage effect on the poorest of families.
Deputy Michael Healy-Rae: On community employment schemes, we all know the great work done by community employment schemes the length and breadth of this country. The proposed cuts to those schemes will result in the closure of schemes throughout the country and will put others in danger. Local resource centres, which assist thousands of people, will be forced to close their doors. These schemes play a vital role in the provision of services to those who are less well off, including the elderly, people with disabilities——
Deputy Michael Healy-Rae: ——and those impoverished as a result of years of cutbacks and a lack of investment. I urge the Government to reverse the cutbacks to the CE schemes and instead invest more money in them to make them more viable. They also house many community and voluntary services that could be forced to cease operating in the event of their closure. There are 22,000 people currently availing of community employment schemes, which provide training and upskilling. CE participants also assist in the provision of key services for the unemployed and families. CE schemes are important for rural Ireland and are availed of by many organisations. The reduction in grant aid for such schemes will cause major problems. While the amount involved is not large, funding towards the cost of training and materials form an important element of these schemes. The future viability of hundreds of these schemes, owing to the 66% cut in funding announced as part of this budget in respect of materials and training, which provide vital services to children, the elderly, disabled and disadvantaged has been slashed from €1,500 to €500.
Deputy Michael Healy-Rae: ——while the Minister, who is on a huge salary and has a big car, hides in the restaurant. I am ashamed at what the Government is doing, including cutting the fuel allowance by six weeks when people almost died of the cold last year. The Government’s answer to them this year is, “Perish away” and “Die and get out of our way”. The Government will not then have to pay them any money.
Deputy Michael Healy-Rae: The Minister of State would want to be careful about what he says in this House, which is on the record of the House. He should have manners when others are speaking. Like the Minister of State I, too, was elected to this House.
Minister for Social Protection (Deputy Joan Burton): I thank all Deputies for their contributions, some of which were more robustly made than others. A lot of valid points were made. I will try to deal with them as best I can.
I reiterate that savings had to be made in the social welfare budget. There were no easy options. Every cut or change affects someone now or in the future. We must balance our national income and expenditure. Momentous events taking place in Europe may give us some easement or may make the situation in the coming year a whole lot more difficult. We must address the deficit.
Deputy Cowen at the beginning of his contribution spoke in glowing terms about the enormous increases of 300% plus in the social welfare budget at a time when inflation amounted to only a small amount. When I came into office, I inherited cuts of more than €800 million from Deputy Healy-Rae’s former party.
Deputy Joan Burton: For the first time in three years, there will be no cut in overall rates. Deputy Healy-Rae’s former party introduced a cut of €8 per week in all the primary rates, other than for old age pensioners. I made a strategic decision——
Deputy Joan Burton: ——to maintain the primary rates to give pensioners, people on jobseeker's benefit, lone parents, people on invalidity and disability allowances, certainty about their primary income rate. As such, there is no cut in rates. However, savings of €475 million must be made and, in addition, the social welfare system must be reformed to make it easier for people to be supported in education, training and employment. As I have pointed out to Deputies previously, commitments were made to the troika in respect of reforming social welfare on the lines of single payments to people between the ages of approximately 18 and the time of retirement for those in their 60s. This is the backdrop against which the Government addressed this.
I have heard Members on all sides make clear their views regarding the cuts. Members also have suggested that various groups should be excluded from cuts. It is extremely difficult to take away anything from people who have relied on it and who have managed their personal budgets based on their main income, as well as the additional benefits they receive. I am very sympathetic to all those who are struggling in adverse circumstances and am aware of the extent to which Members on all sides of the House are aware of this as it affects their constituents and, in some cases, members of their families.
The fact remains, however, that in a budget of more than €20 billion, the Government has been obliged to make an overall cut of 2%. It has tried to do this in a manner that is reforming and fair, while retaining the basic rate. Last year, a family with three children would have had a cut in its child benefit of €10 per month, while someone in receipt of a jobseeker’s payment would have lost €8 per week. This is not happening this year and I hope this will allow people to spend with confidence——
Deputy Joan Burton: ——the great things that happened in the North. I noted with interest and draw Members’ attention to a statement from Alex Maskey welcoming an announcement on fuel allowance by the Deputy First Minister, Mr. Martin McGuinness and the First Minister, Mr. Peter Robinson.
Deputy Joan Burton: This is north of the Border. The statement noted: “The extra fuel payment will go to approximately 250,000 ... people. Those suffering from cancer, those in receipt of Pension Credit will receive a one off payment of £100.”
Deputy Joan Burton: It went on to state, “Those in receipt of Income Support, Employment Support Allowance (income related) and those in receipt of Job Seekers Allowance will receive [a payment of] £75.”
Deputy Joan Burton: Many Members have expressed an interest in the community employment schemes. Deputies on all sides of the House value the importance of community employment schemes and the good work they do----
Deputy Joan Burton: ——in communities throughout the country in every town, village and city. In January, the community employment schemes, together with the labour services side of FÁS, will move from being under the aegis of the old FÁS organisation and will come under the remit of the Department of Social Protection. I wish to send out a message of reassurance in this regard. When the community employment schemes come under the aegis of the Department of Social Protection, there will be a review by the officials who deal with such schemes.
Deputy Joan Burton: They will meet representatives of all the community employment schemes and will go through their budgets with them to achieve two objectives. The first and most important objective is to ensure that the people who participate in community employment schemes get a quality experience, including appropriate training, which will enable them to be of service to their community and to get a job, which I acknowledge is extremely difficult in the current jobs market. As for the second objective, I note many Members present are business people. When these schemes come under the aegis of the Department of Social Protection, it is reasonable for my Department to see their accounts and to ascertain their costs.
Deputy Joan Burton: As Minister, I give a commitment in this House that schemes which provide value for money and a quality experience for the participants do not have anything to fear in respect of such a review.
Deputy Joan Burton: Deputy Mattie McGrath has a lot of involvement in community employment schemes in County Tipperary, just as has Deputy Eric Byrne in Dublin South-Central and just as have I in my constituency.
Deputy Joan Burton: The Minister, Deputy Howlin, has provided an extra €20 million for an activation fund increase as well as €4.2 million in regard to a training fund, but what we require is a review——
Deputy Barry Cowen: When Minister said there is increased funding for activation measures, is she saying there is no cut in the materials grant for CE schemes, or is she saying there is an improvement?
Acting Chairman (Deputy Peter Mathews): Deputy Ellis, please. I am speaking to every Member of this House. There is a decorum in this House that I would like to see present at all times. I am putting the question to the House.
|Bannon, James.||Barry, Tom.|
|Breen, Pat.||Bruton, Richard.|
|Burton, Joan.||Butler, Ray.|
|Buttimer, Jerry.||Byrne, Catherine.|
|Byrne, Eric.||Carey, Joe.|
|Collins, Áine.||Conaghan, Michael.|
|Conlan, Seán.||Connaughton, Paul J.|
|Conway, Ciara.||Coonan, Noel.|
|Corcoran Kennedy, Marcella.||Creed, Michael.|
|Daly, Jim.||Deasy, John.|
|Deenihan, Jimmy.||Deering, Pat.|
|Doherty, Regina.||Donohoe, Paschal.|
|Dowds, Robert.||Durkan, Bernard J.|
|English, Damien.||Farrell, Alan.|
|Feighan, Frank.||Ferris, Anne.|
|Fitzgerald, Frances.||Fitzpatrick, Peter.|
|Flanagan, Charles.||Gilmore, Eamon.|
|Griffin, Brendan.||Hannigan, Dominic.|
|Harrington, Noel.||Harris, Simon.|
|Hayes, Brian.||Hayes, Tom.|
|Heydon, Martin.||Howlin, Brendan.|
|Humphreys, Kevin.||Keaveney, Colm.|
|Kehoe, Paul.||Kelly, Alan.|
|Kenny, Seán.||Kyne, Seán.|
|Lawlor, Anthony.||Lynch, Ciarán.|
|Lyons, John.||McCarthy, Michael.|
|McEntee, Shane.||McFadden, Nicky.|
|McGinley, Dinny.||McHugh, Joe.|
|McLoughlin, Tony.||McNamara, Michael.|
|Maloney, Eamonn.||Mathews, Peter.|
|Mitchell, Olivia.||Mitchell O’Connor, Mary.|
|Mulherin, Michelle.||Murphy, Eoghan.|
|Nash, Gerald.||Neville, Dan.|
|Nolan, Derek.||Ó Ríordáin, Aodhán.|
|O’Donnell, Kieran.||O’Donovan, Patrick.|
|O’Mahony, John.||O’Sullivan, Jan.|
|Phelan, Ann.||Phelan, John Paul.|
|Reilly, James.||Ring, Michael.|
|Ryan, Brendan.||Sherlock, Sean.|
|Shortall, Róisín.||Spring, Arthur.|
|Stagg, Emmet.||Tuffy, Joanna.|
|Wall, Jack.||Walsh, Brian.|
|Adams, Gerry.||Boyd Barrett, Richard.|
|Broughan, Thomas P.||Browne, John.|
|Calleary, Dara.||Collins, Joan.|
|Colreavy, Michael.||Cowen, Barry.|
|Daly, Clare.||Doherty, Pearse.|
|Donnelly, Stephen S.||Dooley, Timmy.|
|Ellis, Dessie.||Ferris, Martin.|
|Flanagan, Luke ‘Ming’.||Fleming, Tom.|
|Grealish, Noel.||Halligan, John.|
|Healy, Seamus.||Healy-Rae, Michael.|
|Higgins, Joe.||Kelleher, Billy.|
|Kirk, Seamus.||Kitt, Michael P.|
|Mac Lochlainn, Pádraig.||McConalogue, Charlie.|
|McDonald, Mary Lou.||McGrath, Finian.|
|McGrath, Mattie.||McGrath, Michael.|
|McLellan, Sandra.||Murphy, Catherine.|
|Nulty, Patrick.||Ó Caoláin, Caoimhghín.|
|Ó Cuív, Éamon.||Ó Fearghaíl, Seán.|
|Ó Snodaigh, Aengus.||O’Brien, Jonathan.|
|O’Sullivan, Maureen.||Pringle, Thomas.|
|Ross, Shane.||Smith, Brendan.|
|Stanley, Brian.||Tóibín, Peadar.|
|Troy, Robert.||Wallace, Mick.|
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