Pre-Budget Submissions on Poverty: Motion.

Wednesday, 30 November 1988

Seanad Éireann Debate
Vol. 121 No. 9

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An Cathaoirleach: Information on Tras Honan  Zoom on Tras Honan  Under an order of the House made on 4 November, 1987 the overall time limit for this debate is one and a half hours. Therefore, Senator Ferris, who is proposing the motion, has 20 minutes, with 10 minutes to reply. Each Senator who will make a contribution will also have ten minutes.

Mr. Ferris: Information on Michael Ferris  Zoom on Michael Ferris  I move:

“That Seanad Éireann takes note of the pre-Budget submission to the Members of the Houses of the Oireachtas from the Conference of Major Religious Superiors and also the report on Combat Poverty from the Combat Poverty Agency and calls on the Government to take appropriate steps in the upcoming Budget to address these serious issues.”

This motion specifically calls on the Minister, as the Government representative with responsibility in the area of social welfare, to take the appropriate steps in the upcoming budget to address the serious issues which have been addressed by these two outside agencies. They feel justified in making the statements they have made and, indeed, have prepared a magnificent set of documents which they have researched independently, and laid before the Houses of the Oireachtas. I take this opportunity to thank both groups of people, the Major Religious Superiors and the Combat Poverty Agency, for bringing to our mind, in a very clear way, the whole concept of poverty and the poverty trap as it applies to the citizens we represent and indicating the responsibility that we as legislators have in ensuring that their submissions are taken seriously and that on budget day some tangible evidence of the Government's commitment to addressing these problems is forthcoming.

[1008] I realise that the Minister will tell me he has already addressed some of the problems which have been outlined by these two bodies. On the day of the publication of one of the submissions the Minister announced steps to take account of the curse of moneylenders. It is true also that in last year's budget he went some way towards addressing the problem of the poorer sections in the social welfare code.

The document submitted by the Conference of Major Religious Superiors states that more than 1.2 million people live in serious poverty in Ireland today. This is more than at any time in the last 20 years and the numbers in poverty are growing. The gap between them and the better off is widening and we are producing a deeply divided two-tier society of “haves” and “have nots”. This comes from an organisation with a predominant religious overview of the problems. Missionaries in my constituency in South Tipperary — particularly relevant to Carrick-on-Suir — have been prompted to make public statements from the pulpit, indicating the necessity for Government, Oireachtas Members, office holders and all of us to address the problems in individual areas as they have come across them. My colleague, Deputy Mervyn Taylor, has put down a Private Members' motion in the other House, specifically identifying Tallaght as a problem area where, unless the problems are addressed urgently by Government, they could get totally out of hand and the whole structure of society would break down.

The submission states:

Yet this need need not be so because Ireland is the twenty-seventh richest country in a world of more than 160 countries. The numbers living in poverty grow and the rich-poor divide widens because of the way we organise our resources. Government policies have obviously failed to reduce poverty. They have failed on their own terms and they have failed on Christian terms. The debt/GNP ratio has fallen even faster than planned; we have low inflation, increased real output and a [1009] surplus balance of payments. Yet these developments have not produced additional jobs and they have made absolutely no impact on poverty. In Christian terms Government policies can be judged on the Gospel guideline that “By their fruit you shall know them”. What has been their fruit? Increasing poverty and a growing rich-poor divide. On these terms too the Government fails. The situation could be different and action should be taken to make it different. Policies to tackle poverty should be given top priority in the 1989 Budget. Not to do this would be immoral given the present reality of poverty in our country.

These are extremely strong words. If they were written by a political party one could understand that there would be a bias in them, particularly if it was a political party in Opposition. The Government must take this absolutely seriously, as we do, as a small political party group in this House. It is a question of the priorities that need to be addressed. We can listen every day to news of the turning around of the economy but we must consider whether we are turning around the emigrant ships, whether the 30,000 people who leave our country every year mean anything to us, whether the 250,000 people without work is of any concern to us and how the people at the lowest level of unemployment assistance or supplementary welfare assistance are expected to survive when the figures produced by both these agencies would indicate that what we are giving them from social welfare, which most of us would consider their right, puts them into this poverty trap which all of us are concerned about.

We chose this resolution at this appropriate time because it is one of the last opportunities that we in the Labour group within the Seanad will have of coaxing the Minister to take serious action in the 1989 budget. I was pleased to hear him confirming recently that he intends to do this. I do not expect to be given the privilege of the disclosure of any budget provisions that might or might [1010] not be part of the Government's efforts to bring the country with them but we are concerned that the specific areas which have been identified should be addressed in no uncertain terms.

The submission also states that in terms of taxation we are far from being the most taxed nation in Europe. That is an interesting statement because every day we hear people talking about changing the tax system, rationalising the tax system, reducing the tax burden and all the other clichés that come from every party in this House. We have been consistently saying in the Labour Party that the whole structure of tax and the whole tax net should be widened so that the people who are overtaxed would feel that other sections were making a fair effort at contributing into the overall take from the State in the area of taxation. We should not allow ourselves to feel that we are all paying too much. We do have a social conscience and a social responsibility to those who are unable to have the privilege of paying tax. These are the people in receipt of unemployment assistance and supplementary welfare benefits.

That immediately raises the problem which has been identified by the Labour Party Leader, Deputy Dick Spring, and by the Labour Party spokesman on social welfare, Deputy Michael Bell, arising from some of the gestures that are made to help people, particularly over the winter period. They have referred to the strictures written into the free fuel scheme, particularly now that it has become a national scheme, not operated by health boards as in the past. For instance, a family whose only breadwinner is on unemployment assistance have been denied access to the scheme because one of their children is over 18 years. The fact that the child was in fulltime education would have meant that the family would have qualified for help in any other year, but not this year because that child is considered to be an adult. In the case of an old age pensioner and a child of that pensioner living at home to look after him or her and drawing unemployment assistance, one disqualifies the other. Somebody must keep [1011] the home fires burning. If they were on their own in two separate houses they would qualify, but because they live together to sustain one another in these difficult times, they disqualify one another.

We have also addressed the problem of money lending and the trap that people fall into with moneylenders. Their opportunity to stay away from that scourge in our society has been made more and more difficult because of the limited incomes available to them. We know what means testing is at the level of unemployment assistance. It is so strict that the continuing harassment of people almost makes them feel guilty about applying for what is, in fact, their right. Nobody from my party has ever defended the breaking of laws or regulations in connection with entitlements to social welfare, but it is becoming so difficult to apply and qualify that people are now refraining from applying and are emigrating instead. That is an indictment of all of us. When we bring in schemes with the intention of helping people we should ensure that the regulations are not so discriminatory that they actually preclude quite a lot of people from qualifying. We are talking in terms of free fuel valued at about £5 a week between now and sometime in the spring which would alleviate some of the difficulties these people are faced with.

Even in the last budget the whole question of the single woman's allowance was ignored by this Government. This is a group of people who have an extremely limited income. They remained at home to look after their parents all their lives and never had the privilege of working or paying contributions that might qualify them for anything. A scheme was brought in but to qualify for it they would literally have to be standing out in the streets with practically nothing on them, with no roof over their heads. It was left untouched in the last budget without any improvement. It is almost impossible for those kinds of people to survive.

It does not give us any pleasure to point out these things but they have been [1012] pointed out by people who we feel are qualified to address these problems. They are asking us in relation to the oncoming budget to have regard to the amount of money that is considered by all the experts as necessary to bring people above the poverty line. These amounts are identified in the submission from the religious superiors in relation to social welfare. It would mean that payments would be substantially increased in line with the recommendations of the Commission on Social Welfare to give a single person £60 per week and a couple £96 per week.

In terms of education, it would mean acknowledging that the present education system benefits the better off. It would mean putting substantial resources into education that benefits the poor, into developing alternatives and into adult and community education. In health care, it would mean acknowledging that the poor have borne the brunt of all the cuts in this sector in the past two years. In turn, this would mean that resources would now be targeted specifically to discriminate positively in favour of the poor, community care and primary health care. The rights of those in the category of PRSI contributors were removed from them by legislation which insisted that they should make contributions towards health care and health services by £10 on admission to hospital and £10 a day for the first seven days, together with all the other difficulties that they have to overcome. These are people who are contributing.

The Combat Poverty Agency have produced an excellent document which is highly statistical but very valid. Their key findings indicate the number of people whom they consider to be very poor. That number of people depends on how one defines poverty. It is very easy for the privileged of the Houses of the Oireachtas to indicate the levels of poverty, but if we are to consider at all seriously the report from the Combat Poverty Agency we must bear in mind that they were extremely careful about how they approached this problem, how the survey was carried out and how they [1013] got their data, the number of people that they interviewed and the households they interviewed. That revealed a range and depth of financial poverty that is alarming in a society that has long claimed to be concerned about inequalitities. Surely these reports would not be published by these two agencies before the budget if the Minister, as he has occasionally said, had addressed this problem last year as a beginning. We will only be satisfied in the Labour Party if there is some tangible evidence of a positive response in these areas at the lowest levels of the social welfare code. Unless these are addressed urgently, then we will feel that the Minister has ignored both these organisations.

The Combat Poverty Agency go on to define who are the poor and they immediately identify households headed by the unemployed, families with several children and indeed farming households. They stand out as the three main groups. In spite of the words of the Minister for Agriculture and Food there are poor family farms trying to survive in rural Ireland that have not been assisted by the Common Agriculture Policy or by the disadvantaged area schemes or in any other way. It is because of that that we can group everybody together in a situation which fits neatly into the areas which we represent.

In the conclusion to their submission the Combat Poverty Agency say that turning to the performance of the social welfare system in dealing with poverty, they found evidence of significant gaps in the safety net which the system seeks to provide. About 10 per cent of persons had incomes below the supplementary welfare assistance standards. We all know that supplementary welfare is a discretionary thing. It depends on the humour of the supplementary welfare officer on any given day. With the lack of privilege, the lack of confidence and the lack of confidentiality in the areas where supplementary welfare officers work, the whole country knows if you are in difficulty. You are berated by questions of a very personal nature with no realisation that only those on the bread-line and below go to that length to [1014] get money in serious circumstances. We should be conscious of that.

That is what this resolution is about. It is requesting this House to note these two reports, on which I compliment the agencies, but it also asks the Minister specifically to do something about these problems before we have serious social issues, if we do not already have them in Tallaght, Carrick-on-Suir and other areas. The issue is very serious and we need a positive response from the Minister that he will address the problems.

Mr. Harte: Information on John Jack Harte  Zoom on John Jack Harte  I second the motion. I am sure the Minister and the Government are not unaware of the extent of the problem. It would be unfair to suggest that nothing has been done in trying to tackle the question of poverty. I must confess to having a bit of a hang-up about this question of poverty and the fact that it is not something new. It has been in existence for a long time. As long as you have a private enterprise system, you will always have poverty. That is a reality.

The one thing I would say about the various schemes is that the poor seem to be always excluded from the main decision-making processes in society. For example, the Dublin city draft development plan was the most important proposal for some of its poorest and unorganised communities, yet none of them saw the plan. I doubt very much if many of them were consulted. This is a very poor substitute for going out to communities and drawing up a plan with local community participation. It is possible for these unorganised people to view and comment upon the plan. They have the right to oppose the already made plans of administration. For example, I speak now in the area of the controversy over the Clanbrassil-New Street road plans. That revealed the structural faults of the whole planning process when it comes to the question of the poor, to the extent that the rights and wrongs of a local issue are never given sufficient consideration. The people are never consulted in the way they should be consulted and they are always told about the thing after the event.

[1015] The Council of Ministers in December, 1984 established the poor as persons, families and groups of persons whose resources, material, cultural and social, are so limited as to exclude them from the minimum acceptable way of life in the member states in which they live. They then went on to point out some facts on poverty in the Republic of Ireland and emphasised two recent conferences on poverty where it was stated that the top fifth of income earners in Ireland use about twice the amount of State expenditure on education in relation to the overall population. In taxation the pattern transfer is regressive. For example, taxes on profits and property have dropped to 7 per cent as a proportion of all tax. That was stated in 1984. I would suggest that it has regressed a little bit further still and created a greater imbalance.

Some effort has been made on the question of mortgages. In the case of people with large houses and large mortgages, the benefits are loaded in their favour. The people who cannot get jobs are the people in the highest risk areas and they are the lower socio-economic groups. Arguments have been going on for years about the redistribution of wealth, but we still have the problem. For example, in wealth the share of direct income going to the top 10 per cent of the population amounts to about 35 per cent, perhaps more. The share of income going to the lowest 30 per cent amounts to about 3½ per cent to 4 per cent or maybe even less. I have not got the up-to-date figures.

No matter what way we study the situation or how long we study it and no matter how determined we are about tackling poverty, we do not seem to be able to come to terms with the problem in Tallaght where we have an unemployment rate of about 90 per cent. We do not seem to be able to come to terms with the other area that Senator Ferris mentioned in his own constituency. Overall we have about 20 per cent of the people out of work and the lack of effort with regard to the creation of jobs is [1016] showing up very much. The number of welfare recipients, based on the number of households, is increasing to well over two-fifths. About one-fifth of all households are relying on social welfare payments. A very small minority of social welfare recipients have another source of income.

The inequality in society between the rich and poor has always been a topic that has been addressed time and time again, yet we never seem to come to a point where we can say that the situation is now in hand. I have mentioned this before in this House and I make no apologies for mentioning it again. In the period between 1960 and 1970 profits were the best ever and wage increases and the salaries were best in that decade, bu there was not one extra person at work. I suggest that that affluent period has had a harmful effect, a follow-on effect, right up to the present day. It has been a contributor to the problem of low income and long-term unemployment. It has been a contributory factor in our failure to pull out a new deal for the elderly. We have got round certainly to a lot of things.

Everyone seems to make the assumption that free enterprise will automatically result in a significant improvement for all of us. They say that the incomes of the poorest will be pulled up by economic growth and rising standards of living. This is a problematic thing and I would have to hear a lot of arguments before I would be convinced that this is a fact. I doubt very much if the private enterprise system can do that.

There is no evidence that economic growth benefits everyone equally. The reform of the social welfare system must be carried out and I welcome the Minister's efforts in this respect, and with regard to moneylenders. I know the man is on top of his job. My argument is not with him but with the system. Quite frankly, I do not think the system is geared to bringing about real equality.

We talk about the reform of the taxation system but, I doubt very much if we will ever get to the point of redistributing wealth. Let us not cod ourselves; there is [1017] no link between economic growth and all the people doing well. In fact it is the other way round. Economic growth seems to create two levels of society and that is exactly what we have and what we are going to be stuck with.

As long as we want to adhere to a private enterprise system, and that seems to be the way the Irish want it, we had better recognise that we will always be talking about improving the social welfare system. We will not be creating enough work for everybody. Let us stop codding ourselves and face up to the fact that we are adopting a stop-gap approach all the time. We are trying to patch up problems as they arise, which are created by the very nature of the society we live in.

Mr. Farrell: Information on Willie Farrell  Zoom on Willie Farrell  I would like to pay tribute to the Conference of Major Religious Superiors and to the Combat Poverty Agency on producing two nice booklets but I cannot agree with all that is said in them. While no one disagrees that there is poverty, we will all agree that there is no comparison between poverty today and poverty 30 years ago.

Mr. Harte: Information on John Jack Harte  Zoom on John Jack Harte  It is all relative.

Mr. Farrell: Information on Willie Farrell  Zoom on Willie Farrell  No Government have done more than Fianna Fáil over the years to eradicate poverty. We have never had a better Minister to look after the poor in our society than Dr. Michael Woods. Everyone will agree with that. He has put great effort into resolving a very difficult problem. In a time of grave financial constraints he has extended the scope of the fuel scheme and made it a national scheme. By doing this, he has given people an opportunity to use the money to buy whichever type of fuel they like, and that is a major step forward. He has increased social welfare payments by up to 11 per cent to the long term unemployed, which is a very major step for those people. He has tackled social welfare fraud, which was one very big problem. This was taking a lot of money from those who should be getting it and giving it to those who were not entitled to it. In [1018] that regard he has done wonderful work and he deserves all our praise and congratulations.

We should try to define poverty. Everyone seems to think that poverty is a lack of money. There are many people with lots of money who have not got the heart to spend it. They are living in terrible conditions and are lonesome. Money would not improve the lot of these people. This is a very serious type of poverty which we need to do something about.

I am convinced that much of the poverty in our society today is self-imposed to a large extent because proper use is not being made of the money we are giving to people. A high percentage of the money given in social welfare payments is spent on drugs and alcohol. This money was given to people to live on. There is no mention in the booklets as to how we would come to grips with the waste of financial assistance given to poor people.

Where are the moneylenders operating to the greatest extent? It is in housing estates. Why are they operating in housing estates? It is because they know they can get the social welfare money from the people. Unfortunately, many poor people today are easy prey; to use an American cliche, taking money from them is like taking candy from a kid. They are poor, but it is self-imposed poverty. They are not making the best use of the money they are getting in many cases. If that money was used for food and clothes there would be no such thing as drugs or drink in areas where there is a high dependence on social welfare.

There is no denying there is poverty but we are not takling the problem of making the best use of what is given. It is time we did something about hire purchase. Many poor people are caught in a hire purchase trap and do not know what they will end up paying back. It is almost as bad as the moneylending trap. The legislation should be tightened in this area. People should not be able to get two or three televisions, stereos et cetera on hire purchase too easily. They are easy prey. They want to have things because [1019] someone else has them and they are caught on that hook. We have to come to grips with this. I am fully convinced that we will never eliminate poverty until we get back to basic economics and get people to understand how to make the best use of money.

Listening to the radio the other day, I heard one woman say that they were getting along nicely on £140 per week; another woman with £120 per week could not live on it. There is a great need to combat the abuse of alcohol, drugs and hire purchase. These are three major drains on social welfare payments and the money is not being used as was intended.

I congratulate the Minister on his very positive efforts to come to grips with the moneylenders. They are putting the social welfare money in their pockets and are making big profits. It is a great step forward that the Minister is putting money aside to guarantee loans for people so that they can be helped to get money through the local bank or credit union at a normal, reasonable rate of interest. This will save a lot of money. I sincerely hope that everybody dealing with poverty will help the Minister to put an end to creaming-off of money from people who need it most. They are making the moneylenders wealthier.

The Government have done a lot to improve matters. We can talk about providing all the social welfare we need but we really must try to get people back to work. I have always maintained that when people are working they have a different mentality and outlook. They meet at lunch time and talk about what they are doing with their homes, for example some one may have got in double glazing but when they are on the dole they are demoralised by doing nothing and they go down to the pub.

Our training programmes are a great incentive because they train people to get back into work again. The FÁS training programmes are wonderful, and also the social employment schemes have done a great job. This has got people out working again. They work alternate weeks and may work for somebody else the other [1020] week and thus make more money. Another great scheme this Government have introduced to help the unemployed is where one can work two days a week and draw social welfare for the remaining three days. This is another great thing. The last Government introduced the social employment scheme and I congratulated them when it came in first. I think it is a great scheme. It has done great work, which I do not deny. I am very pleased with it and I hope it will be continued.

All schemes, both training and social employment schemes have done great work, but unfortunately those people who write those reports do not seem to have given credit to the Government for doing anything. The Government have always done their best and try to do what they can to alleviate poverty and suffering from our society. I would hope that all those people would play their part to help us to nip the problems in the bud. Nobody has tried to come to grips with our two biggest problems: moneylenders and the abuse of alcohol and drugs.

Minister for Social Welfare (Dr. Woods): Information on Michael J. Woods  Zoom on Michael J. Woods  I have no difficulty in accepting the motion before the House provided the Senators accept that we exclude from it the political statements which are in this document, “Who Benefits Who Pays”. As Senator Ferris rightly pointed out, there are some very strong political arguments against the Government on page 12, saying that Government strategy has failed and is wrongly directed. Neither of these assertions is right. The Programme for National Recovery, the programme with the national partners, stresses publicly the aims for job creation and the maintenance of social welfare together with the improvement of social welfare payments as resources are made available. These are set out in that report. This is public knowledge and yet we read in these reports that they are not mentioned at all by the Government.

If the Senators accept that I cannot accept these kind of statements, but can accept the facts in these reports, then I have no difficulty with the motion. The [1021] booklet “Who Benefits Who Pays” and the Combat Poverty booklet are actually basically about the ESRI report which was commissioned by the Department of Social Welfare and then passed over to the Combat Poverty Agency — when it was set up as being the appropriate agency to handle it thereafter. They published the report and presented it to me as Minister.

The first part of that report gives the agency's views but the second half has the basic data that we should focus on. This data is valuable if you want to try to find out where the real proverty is and where the poverty traps are and all the rest. That is particularly valuable and I will deal with it in a minute.

Today another report was published which should be taken in conjunction with them, and I bring this to the attention of Senator Ferris. This is the NESC report that covers the cash side. The other thing I would mention is that NESC report only comes up to the early eighties but it does show some very valuable trends. This ESRI report is only a preliminary report which deals with the cash side of social welfare and poverty in our society. It does not take in the non-cash side. That report covers the period up to the early eighties, but the second part of the ESRI report does that and will be out early in the New Year, so the two reports taken together give the complete picture.

Mr. Ferris: Information on Michael Ferris  Zoom on Michael Ferris  Will the budget respond?

Dr. Woods: Information on Michael J. Woods  Zoom on Michael J. Woods  In any event I know most of these points without any of the reports. I am sure the Senator does too, and so does anybody else who is very much involved with this problem, but having reports to pinpoint and target things is very valuable, especially when they are not tying in people's value judgments, because we could all do that. We could all stand up and say in a heated or a very emotional way what we feel, but it is very good for all of us to have someone like the ESRI who will come along and do a specific piece of research which pinpoints certain things very clearly. I know this would have been very valuable to the [1022] previous Government. It is also valuable to this Government.

This NESC report came out today and one of the conclusions in that study shows that family households, households with children, have benefited significantly less than other households from the pattern of the redistribution in the policies reviewed. The trend with the changes in taxation policies and the changes in social welfare policies and all the rest were not supporting families, and this even shows up in that NESC report. As I have said this report also highlights the fact that the ERSI will be addressing the issue of non-cash payments in their next report on poverty which is expected to be published early in the New Year. Valid policy conclusions must be based on an understanding of the combined effect of cash and non-cash State expenditure on household incomes and set in the context of overall and social development especially of employment and unemployment.

Senator Ferris raised quite a number of points. I will mention a couple. He mentioned the single woman's allowance, which benefited from the 11 per cent increase. Whatever about conditions of receipt, which are still the same as he said, we brought it up to the long term unemployment assistance rate, so the 11 per cent increase was applied, bringing it up to £42. He also mentioned moneylenders. I asked for the report on moneylenders last January and the basic research and information in it is very valuable. Apart from all that is said about incomes which is already dealt with in the Commission's study — the Commission has made all that fairly clear — what is happening and why it is happening is particularly valuable and is very useful for finding solutions which is what I am interested in. It shows that people do not have options.

One of the recommendations, apart from the legislation which the Government has already accepted and is going to take action on, is the question of the guarantee fund. This is very interesting. I have set up such a fund already.

The credit unions have indicated that [1023] they will co-operate with us and the banks have indicated that they are very sympathetic and we would hope to have their final views on it next week. We hope to be able to tackle individual cases and do a good deal of work in that area. It is a very valuable report and I have already given a lot of attention to it.

The Senator mentioned the rates of £60 and the £36 with a payment of £18 per child in addition to that. On that basis a family with three children would be getting, if we took account of the Commission's findings at the moment, some £150 per week. This is £150 plus various allowances, whether it is fuel or whatever else. Now the average industrial wage, as distinct from just the average wage, which would be lower, of around £220, net of tax and PRSI works out at £162 take-home. The problem we have is that the amount of money available at any time can only come principally from the people who are the main tax and PRSI contributors, because they are the largest sector.

You may argue that there are other people who should be brought into the net, and you have to agree that the Government have been taking action in that area with a lot of success in broadening and bringing more people into the net. Nevertheless, the impact of that on the total figures can be small, because it is the large numbers who make the big continuous contributions to Government resources. The closeness between the average industrial wage and what you will be paying under that rate will cause a difficulty. We have taken a very significant step along that road this year. It would be our intention to continue to maintain the position of those on social welfare and to improve it in so far as this is possible within the resources available, which will be known after the end of the year, as far as we can along the lines we have taken so far.

In relation to the CMRS report, I have to point out that in company with the social partners the Government have drawn up a Programme for National Recovery which specifies in relation to [1024] those on social welfare that the Government will maintain the overall value of social welfare payments and direct any extra resources available to those receiving the lowest payments. We have lived up to this commitment and indeed, we have exceeded it. The issues raised this evening by Senators are addressed in the recent ESRI report on poverty and the social welfare system. The main value of that report is that it highlights those who are most at risk from poverty and how their position has changed over time. The principal value of that report is that no matter how you set the model to look at the position, it is how people's position has changed over the time that is the fact important element apart from the fact that the overall levels are recognised under the commission's report. It pinpoints the groups at highest risk. The groups at highest risk are large families; families where the head of the household is either unemployed or on low wages; single parent families; families where the head of the household is sick or disabled; and low income farming families. It pinpoints the people who are coming off worst in all the developments that have taken place in recent times.

I have to point out that those figures were done at the end of 1986 and the beginning of 1987 so they are before the special payment increases that we gave this year, which applies from July on. They have to some extent redressed that situation and they are a step along the road which is proposed by the Commission on Social Welfare.

The Conference of Major Religious Superiors are concerned about the poverty traps which can affect those identified as being most at risk of poverty and marginalisation — the unemployed, those with children, lone parents and those on low wages and households where the breadwinner is sick or disabled and unable to provide for his family. These concerns are shared by many organisations who are involved with those people dependent on social welfare. I see and hear their problems daily. Only this week I met a number of voluntary organisations working in the social [1025] services area in a pre-budget forum. It is the first time we had this but we had a whole day debate with the principal bodies who are involved in this area, including those representing the elderly, the single parents, the unemployed, the voluntary organisations for the handicapped, the Society of St. Vincent de Paul and a number of others who make pre-budget submissions. The submissions were made and were considered in this whole day forum and one of the things that emerged very clearly in that was that the widowers' association are a group who feel particularly left out because there is nothing for them in the arrangements which exist in this country up to this time. The only thing they can get is supplementary welfare, or if they say they are unemployed and if social welfare can turn a blind eye then they can look after a bad situation in that way. They had their view to put forward and it was much appreciated by those who attended.

Again and again the same concerns came up. It is useful to look at these issues against the Government's overall objectives in the social welfare area as set out in the Programme for National Recovery. A comparison of the findings of recent reports and submissions made to me and the progress we are making in relation to the achievement of the objectives in the Programme for National Recovery shows that we are moving in the right direction. Of course, I can understand the anxiety of those relying on social welfare payments for quicker movement towards the attainment of these objectives. I would love to have the resources at my disposal to meet all my objectives, but the reality is that we have to do the best we can in what is still a difficult financial environment. There is no doubt that one of the greatest concerns is the level of social welfare payments, particulary to those who are long-term unemployed and those with children.

Every report and submission I have received has raised this issue. We, in Government, have already taken this issue on board. We are already committed to maintaining the value of social [1026] welfare payments and we have promised to give special consideration to those receiving the lowest payments. Very significant increases in the lowest rates of payment were granted from last July. A special increase of 3 per cent in personal adult dependant rates of social welfare payments was given and this will more than maintain the overall value of social welfare benefits up to mid-1989. In addition the personal rates of unemployment assistance and supplementary welfare allowance, which are the lowest weekly payments, were increased by the significantly higher figure of 11 per cent. I have also streamlined child dependant rates with a 3 per cent increase in rates generally and a 6 per cent increase for the child dependants of those on the lowest payments. This measure represents a significant improvement in income support for families, particularly in the case of large families. In addition I extended the free fuel allowance to 30,000 long-term unemployed from October 1987.

The Conference of Major Religious Superiors are right when they say that unemployment payments were never intended as a permanent source of income for an individual. Nevertheless, the Government have accepted that unfortunately many people find themselves relying on these payments for long periods. In recognition of this, we have made every effort to improve the level of those payments. For example, a family with three children in receipt of long-term unemployment assistance received an increase of £6.70 per week giving a total payment of £98.80 per week. A widow with three children is getting £93.30 and a couple on retirement or old age pension now get £99.10 per week. This cost £45 million this year and £101 million in a full year. The 3 per cent general increase cost £67 million and the improvements for those on the lowest payments cost £30 million.

Senators will be aware that today I began the payout of the Christmas bonus to all pensioners and long-term unemployed, at a cost of £21 million. This is over and above the £101 million which I have already described. Today's payment [1027] of the Christmas bonus began to the unemployed, and the elderly. Pensioners and widows pensions will come next week. An unemployed man with a wife and three children receives £64 extra this week bringing his total to £163. An old age pension couple receive over £64 bringing their total to £163.60. Compare this with Great Britain and all the resources they have, where an old age pension couple get an extra £10 sterling and the unemployed get nothing. Here in this State some 921,000 people will benefit from our bonuses over this week and next week.

It has been acknowledged by various groups and agencies that the increases provided this year were more than had been expected and that they represent a significant move in the right direction. The chairman of the Commission on Social Welfare recently stated that he was now more optimistic for future developments than he had been when the report of the commission was first published. We have extended the PRSI to cover the self-employed. This has had two benefits: it has improved the equity of the system and it has brought more money into our funds, and it has also created a situation where 70 per cent of the self-employed people up to this have previously ended up falling back on means-tested assistance in their old age. We have put that right and for the future this extension will provide for old age pensions in that area.

I do not want to take up too much time in case there are other Senators who wish to contribute, but in relation to the family income supplement I have had a study done on that. I believe it is a very important instrument and we hope to have a report on that ready in time for the budget. The report of the Conference of Major Religious Superiors points to a number of things which they welcome. One of these is the flexibility in the unemployment payment system which we have introduced — the part-time job incentive scheme which I am very glad to say is now fully operational. It is available nationally for the last 10 days to two weeks. There were administrative difficulties in getting [1028] it going. We had discussions with the unions and it is now available. I hope the educational opportunities scheme will be fully operational early in the New Year. We are extending it to a further ten locations nationally. We have repeated it in Tallaght and Limerick where it was very successful.

A variety of other schemes including the supplementary welfare allowance scheme were mentioned. We are examining the supplementary welfare allowance scheme at present. That examination will be concluded early in the New Year. We have rationalised a number of schemes and standardised schemes to ensure that the benefits go to those who need them in a more uniform way. We found a great deal of variation from health board to health board. The fuel scheme and the footwear scheme have been standardised. As a result quite a number of elderly people who did not claim previously have now come forward to claim the free fuel allowance.

As regards taxation, the Government have already taken a very significant step in extending PRSI to the self-employed from April of this year. That scheme is going very well at the moment. In addition, the Government introduced a set of measures to initiate reform of the corporation tax code. They increased the bank levy by £5 million to £30 million and imposed a once-off tax on pension fund investment income. In addition, through improved collection methods and the introduction of self-assessment we are tackling the problem of non-payment of tax by many in our society. The result of the recent tax amnesty shows the extent of evasion and late payment of tax and more than justifies the Government's approach.

It is clear from the information available that poverty and unemployment are related. Social welfare payments on their own are not the cause of poverty, rather the sharp rise in unemployment in the last ten years has contributed most to the creation of the problems facing us today. If we can create more jobs fewer people will rely on social welfare payments. We will have more income available to [1029] improve the position of those remaining on social welfare and thus eliminate poverty. It is for this reason that the Government has made the stabilising of the nation's finances and the creation of 20,000 new jobs in manufacturing their number one priority this year.

We are well on the way to achieving these goals. The Government have now turned their attention to a greater extent to measures to stimulate further employment. We have seen in recent times the announcement of a series of measures to stimulate a number of sectors of the economy including tourism, forestry, horticulture and agriculture. I assure Senators that now that the Government have the debt problem under control it must stay under control. I am sure Senators agree with that. It now gives the Government time to concentrate their efforts even further on the creation of jobs which is the number one priority. Notwithstanding the difficulties of the last 20 months, which were enormous in financial terms, the Government have maintained the position of those who depend on social welfare and have very significantly improved the position of those on long-term unemployment and supplementary welfare who are the ones identified as having the lowest incomes and the greatest difficulties in the current time. I thank Senators for their contributions.

Mr. Cregan: Information on Denis Cregan  Zoom on Denis Cregan  I listened to the Minister's reply and the impression was given that extra money would go to those who need it most. When the first social welfare Bill was brought into this House by the Minister, recommendations were made to the effect that money should be given to those people who needed it most. We gave the example of couple getting £104 a week while their own daughter or son with three children were getting £96 a week. The Minister did not listen. I admit that the Minister's hands may be tied as regards getting extra money but listening to the reply, you would get the impression that we did not know what was happening. The position of people living on minimal amounts of money is not funny.

[1030] In the early seventies there were 66,000 people idle in the country. The impression is being given that the social employment scheme is creating something and that is not true. The social employment scheme is working in Cork but 340 full-time workers have been let go. We are giving the impression that more people are working but that is not true. That is not the way to work the social employment scheme.

The idea behind the social employment scheme was that a minimum amount of money would be given to a person every week and they could work elsewhere. Agreements were reached with unions and people in full-time employment were made redundant. They were paid redundancy money of between £15,000 to £17,000. A person was employed under the social employment scheme to do that person's job. How logical is that? Is it just to balance the books? The difference between a person drawing unemployment assistance and being on social welfare are defined. No one should agree with what is being done and that includes unions and management. In one authority alone 340 people were let go and people from the social employment scheme took over their work. We gave them £70 a week and they could do what they like the next week. They could work for whoever they liked. That is not how I thought the social employment scheme would work.

I was one of the people who pushed this scheme. It started in three areas and we increased it then to 12 areas. We made no apology for saying that a person should be allowed work for part of a week and draw the dole for the rest. This was done in an effort to ensure that a person did not sit by the fire watching videos every day, demented out of his mind and his family with him. That is what I call poverty. I do not like the idea of employing someone for three days and, as a result, making someone else redundant. If he is over 60 years of age he will not have to sign on at the employment exchange but will have his book sent out to him. He can work away and nobody knows. Fewer people are signing on at [1031] the exchange but money is still being paid out.

Let us spend the money correctly. Let us not create a situation where one person gets £104 a week and their son or daughter who has three children gets £96. I do not believe that is just but that is the way it works. An unemployed person receives £42 a week, big deal. The recommendation was that it should not be less than £55. Have we any idea of what it is like to be living on your own on £42 a week in a dive of a room and giving a landlord or legalised racketeer £20 to £25 a week for accommodation and then try to clothe and feed yourself? It is demoralising to say the least.

We should not give the impression that we are going to grasp something here because we are not going to grasp anything. We should all look at the “Today Tonight” programme for the next two nights and I am sure we will be embarrassed as legislators. Why should we not be embarrassed? We are telling people not to bother signing on any more because they are over 60 years of age and the money will be sent out to them but they will not be on the unemployment list. The number of unemployed people has dropped by 3,000 but what about the 800 people a week who are emigrating?

Two years ago we did not recognise the word “emigration” or talk about it Now it is a nice thing to say that one's son is in America. Now it is a nice thing to say: “I am unemployed”. I do not want anybody saying that we are creating a situation where a person earning £120 a week is let go to make room for a person earning £70 a week. That costs the State more money. Let us take the example of an unemployed person living in a local authority house and a person who is unemployed in the private sector. The person who does something for himself has to pay a mortgage. A person in a local authority house is recognised, and rightly so, while his brother could be unemployed and living in a private house across the road from him. The person in the local authority house has to pay very little rent because he cannot afford it and [1032] I agree with that. He can buy shoes for his children or whatever.

Senator Farrell gives the impression that there are people throughout the country who are drunk every day. I must be going blind or something. How stupid can we be? The person in the private house must live and his pride makes him do the best he can and pay for what he can. He will get the same amount of money but he must pay back his mortgage. Then we talk about the moneylenders and say that they must be got at. What about the legalised moneylenders, the banks? Are they angels? Are not the majority of financial institutions banks or agents of banks?

Dr. Woods: Information on Michael J. Woods  Zoom on Michael J. Woods  The interest rates are——

Mr. Cregan: Information on Denis Cregan  Zoom on Denis Cregan  The interest rates with the Bank of Ireland and the Bank of Ireland Finance are different, yet they are the same company with the same shareholders. We must be realistic. There are people with hire purchase agreements paying twice and three times the rate of interest to the same company because there is a different name over the door.

Dr. Woods: Information on Michael J. Woods  Zoom on Michael J. Woods  That is not the purpose of the scheme.

Mr. Cregan: Information on Denis Cregan  Zoom on Denis Cregan  The banks should be told to lend money at a normal and fair rate but will the banks do that?

Dr. Woods: Information on Michael J. Woods  Zoom on Michael J. Woods  Do you not want me to ask them?

An Leas-Chathaoirleach:  The Senator must be allowed to speak.

Mr. Cregan: Information on Denis Cregan  Zoom on Denis Cregan  The Minister said he met them. Did he ask them——

Dr. Woods: Information on Michael J. Woods  Zoom on Michael J. Woods  We took it up with them as well as with the credit unions.

Mr. Cregan: Information on Denis Cregan  Zoom on Denis Cregan  The credit unions came up with an idea and put it before the Department. I am very conscious of what happened in the Cork area with regard [1033] to credit unions. They are excellent institutions. Why does the Minister not give credit unions more room? He should take it from the banks and give it to the credit unions.

Dr. Woods: Information on Michael J. Woods  Zoom on Michael J. Woods  We are doing it with the credit unions.

Mr. Cregan: Information on Denis Cregan  Zoom on Denis Cregan  They all give so much money——

An Leas-Chathaoirleach:  The Senator must be allowed to continue his speech.

Mr. Cregan: Information on Denis Cregan  Zoom on Denis Cregan  We are saying that we want to help people on the poverty line. Why does the Minister not say to the banks that the mortgage repayments on a private house which was bought when a person was employed should be reduced accordingly instead of taking houses from them. Why does the Department of Social Welfare not say to people who are in private houses and trying to pay mortgages that they will assist them? The Minister is assisting one person because he is in a local authority house and I have no objection to that but his brother could be living across the road repaying £50 a week and nobody is giving him assistance. Yet, if he has to hand back that house we must accommodate him at a cost of £35,000. Where is the logic in that? Those are the people we should be assisting so that they can care for their children.

Dr. Woods: Information on Michael J. Woods  Zoom on Michael J. Woods  We do assist them.

Mr. Cregan: Information on Denis Cregan  Zoom on Denis Cregan  Please explain how you assist them. Those people have to go on supplementary welfare benefit after going to the social welfare officer and after investigating their means but the other person does not have to be investigated at all. If the Minister has money to distribute he should distribute it at a fair rate. He should not give too much to one person and not enough to another with more children.

Mr. Fitzsimons: Information on Jack Fitzsimons  Zoom on Jack Fitzsimons  I am not very enthusiastic about making a contribution to this debate. It is a very serious motion and it [1034] would take some considerable research to do justice to it. In addition, it would take some considerable time and we are limited to ten minutes. From my experience there is not much that can be said except to make broad statements in that length of time.

An Leas-Chathaoirleach:  There are only five minutes remaining. The Chair must call the Senator to conclude at 8.50 p.m. He has five minutes.

Mr. Fitzsimons: Information on Jack Fitzsimons  Zoom on Jack Fitzsimons  That is even worse. I sympathise with the concern expressed in this motion because I was born into the lowest stratum of a rotten class structured society. Things have improved considerably since then but not as much as they should have. To that extent I am in total sympathy with this motion.

This is a very political document made by a religious group. I have no objection to that. But I look back on my youth and at the teaching of my Church and my belief in that more sympathy could have been shown then. For example, in the teachings of St. Paul we were told that the slave should be a good slave, not that slavery was morally wrong. That is unacceptable. It was a public relations exercise and we were conditioned to that. It is the same kind of exercise that conditions people to be patriotic. For example, I know people who did not own a half acre of land going out to die and fight for their country while people who owned the wealth of the land sat back. In many areas this still goes on and I would like to develop that but I am not able to do so within the time limit.

My preference, as I have always made clear, is for a pluralist society; in other words, a society where the rights of a minority are respected as much as the rights of the majority and where the laws are not motivated by any religious group and, further, where the individual is valued as a person and given whatever facilities are necessary for full development and to make a contribution to humanity and society.

This document and its conclusions should be developed further. One cannot [1035] conclude that on its own terms the strategy of the Government has failed and that it is creating a more deeply divided society. We always had that. I have never experienced anything else and that is unfortunate. This Government are doing more than any other Government and this Minister is doing more than any Minister has ever done. Many Ministers in the past have done a lot. In the past I believe that I paid tribute to all parties and I have been critical where I believed criticism was justified. I paid tribute to the Labour Party, and in particular to one Labour Minister whom I knew personally, Jim Tully, who did a lot for the working people both as a Minister and as a trade unionist. He brought dignity to the working man. By and large, all Governments have tried to do that. Maybe they did not make any progress they should have made.

There are areas where I would be critical. For example, I always felt that the lottery is a crying shame. I have known my colleague, Senator Brendan Ryan, to be critical of it and to be criticised by the media for being patronising to the poor suggesting that they were not able to think for themselves. I share Senator Brendan Ryan's views totally in that respect.

People have been put into housing schemes where conditions were such that they were unable to be motivated or to live as human beings. I agree that full employment is the main objective. It is impossible to live in dignity while dependent on social welfare. It is like trying to lift oneself by one's own socks. It is impossible. I would not be critical of those who receive social welfare payments.

There are many other areas I would like to speak about. The treatment of the travelling people is shameful. We are critical and rightly so of apartheid but we have the tragedy of the travelling people in our midst for so long and so little progress has been made.

Moneylending is another area of concern. I would like to touch on farm taxation and other areas. I agree with the [1036] motivation behind the motion but I could not agree with the conclusion: to blame the Government. As the Minister said, he will do everything possible to improve the situation in this regard.

An Leas-Chathaoirleach:  I call Senator O'Shea. I understand that Senator O'Shea is allocating two minutes of his time to Senator Brendan Ryan.

Mr. B. Ryan: Information on Brendan Ryan  Zoom on Brendan Ryan  It is clearly impossible to make a proper contribution in two minutes. I want to raise one very important point about the whole issue of poverty. We all agree that poverty and unemployment are inextricably linked, but it is equally important that in any attempt to end unemployment we do not do it by creating jobs that carry rates of pay which are effectively the same as what people get on unemployment assistance. We have been fed a line by a particular group of economists about the successes in other countries in creating jobs. It has been attributed to reductions in what were described as excessively indexed welfare payments. Let it go on the record of this House that of the 20 million jobs that have been created in the United States of America in the last ten years or so, half of them pay less than the official poverty line in that country. Of the 11.5 million jobs created between 1979 and 1985, 50 per cent pay less than $10,000 a year, less than £7,000 a year. That is no substitute for unemployment. That is not the way to do it. Poverty in work, if anything, is worse than poverty out of work. You have some freedom to use your time when you are unemployed. If you are stuck in a dead end job you have no such freedom.

I appeal to the Government not to allow the huge pressures that are on them to deflect them towards the idea of creating cheap labour jobs, unsecured and badly paid, which will do nothing to eliminate poverty but will give the image of eliminating poverty by taking people off the dole queues.

Mr. O'Shea: Information on Brian O'Shea  Zoom on Brian O'Shea  I should like to respond to one point that was made by Senator [1037] Farrell which I found objectionable. It is the remark he made about people claiming social welfare payments spending their money on alcohol and on drugs. I do not think the point should be dignified by any observation but I would like to respond to it by quoting from the Combat Poverty Report on low income families and moneylending:

The stereo-type of the poor as spendthrifts who waste their money on luxuries and have to borrow from moneylenders as a result is false in the light of our research findings.

That gives the lie to the point made by Senator Farrell.

The national debt must be dealt with but as far as the Labour Party is concerned it is how the debt is solved, who pays for it and what priorities are set that are important. I would go along with what the Minister said, that poverty is not just something money can solve but money has a major part to play in solving it. We brought in this motion in a very positive way. We did not come here to be critical. Senator Farrell said that the present Minister is the best Minister for Social Welfare that we ever had. I could say that he was the worst Minister for Social Welfare we ever had but neither of the two of us would be correct and that type of approach does not help anyone. I would like to put it on record that while Deputy Barry Desmond was Minister for Social Welfare he was the only Minister within the EC countries who kept social welfare payments ahead of inflation and that included a number of socialist governments.

The Minister has brought about improvements in social welfare. We welcome those and compliment him on it but there are other areas where he effected changes that were not progressive. For instance, the number of qualifying contributions needed for disability benefit increased from two years to three years and finally to five years. The number of contributions needed for invalidity pension increased from two years to three years to five years.

If a woman claimed maternity benefit [1038] on her first confinement she could continue to sign for credits and she would qualify for maternity benefit on her subsequent confinements. That has been changed and she must have 13 paid contributions in a particular year. This change runs in the face of the fact that when a new baby arrives the family budget can be very seriously affected. The Government have also reduced pay related benefit to the position where at best £19 can be paid to the recipient.

Senator Cregan raised a very important point regarding the whole area of income tax relief on mortgages. I would like to make the point to the Minister, and I hope the Government will respond to it in the budget, that the more one pays by way of mortgage repayments the larger the amount of tax relief the State allows. I have seen situations where two people took out a mortgage when they were both working and then they both became redundant. When they become redundant their repayments remained the same but there is absolutely no concession made to them under the tax code. There is limited help available under supplementary welfare laws but these are far from adequate. I am not suggesting that the hard pressed PRSI sector should have their income tax relief on mortgage repayments reduced but, in terms of equity, the situation of people who are no longer earning an income but are dependent on social welfare should be addressed.

I would like to deal with the changes that have been brought about in the free fuel scheme. One change was alluded to by my colleague, Senator Ferris. He referred to the situation where a father is on unemployment assistance and there is a child in that home who is attending second or third level education, the father loses that child as a dependant for unemployment assistance. To add insult to injury, the situation now arises that because there is an adult of over 18 years in the home no free fuel allowance will be paid. The situation now is that new UK pensioners and those on occupational pensions only are at or below the old age [1039] pension rate and would no longer qualify for free fuel. The worst problem of all that has arisen is that the health boards have been virtually taken out of the scene as regards free fuel. They are left with a couple of their own payments but basically it was the flexibility that was available to health boards that made all the difference in dealing with the awkward and very deserving cases that arise.

I will conclude by once again saying that we were very glad to bring this motion here. We introduced the motion in a very constructive spirit. We look to the Government to respond to the very many recommendations contained there. The Minister has said that he finds the political conclusions in the document objectionable. I would refer him to one section on page 7 which says that whether poverty is reduced or not will depend to a great extent on the choices made by politicians. I do not see that that particular statement is directed at the Government but as far as we are concerned in the Labour Party, the wrong priorities have been taken by the Government in terms of controlling the debt. The poor are suffering because of it. We stand over our resolution. We are not prepared to withdraw or to water it down in any way.

An Cathaoirleach: Information on Tras Honan  Zoom on Tras Honan  Is the motion agreed to?

Mr. W. Ryan: Information on William Ryan  Zoom on William Ryan  I thought that we could come to some agreement rather than have a vote on this but if what Senator O'Shea has just said is true — that they are not going to change it in any way — I am afraid it will have to go to a vote. I thought they would accept the statement made by the Minister and just leave it at that.

Mr. Ferris: Information on Michael Ferris  Zoom on Michael Ferris  I understand that the Minister resents some references in the reports. We did not write the references. All we are asking is that the Seanad would take note of the reports but the real, important thing is that the Minister would [1040] take action at budget time. I think we are agreed on that.

An Cathaoirleach: Information on Tras Honan  Zoom on Tras Honan  We cannot have the whole debate all over again.

Mr. Ferris: Information on Michael Ferris  Zoom on Michael Ferris  I am trying to be helpful to the Minister and to the Leader of the House. We did not write these reports. We referred to them. We are taking note of them, but we are asking the Minister to take action. He has agreed that he would. If he does agree, then we are pleased.

Dr. Woods: Information on Michael J. Woods  Zoom on Michael J. Woods  In that spirit, I accept your motion. I hope the Leader of the House does likewise. You understand the sort of reference I made.

Question put and agreed to.

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