Joan Burton (Dublin West, Labour) | Oireachtas source

Expenditure on children and families amounts to €2.3 billion. We have a happy population statistic in that we have a lot of children compared to other countries and the overall cost figure includes child benefit. We also spend €230 million on family income supplement. The supplementary payments, including rent and mortgage interest supplement, amount to nearly €500 million; the household benefits package amounts to €283 million; the amount for the much-valued free travel scheme is €77 million; and fuel allowance payments amount to €211 million. Some 80% of expenditure is incurred on a relatively small number of key schemes.

Other than expenditure on child benefit, the respite care grant and domiciliary care allowance, members may wish to note that this expenditure relates to the cost of the weekly rates of payment for the recipients involved. It does not include the cost of supplementary benefits such as free travel and so on.

Appendix A provides further information for the committee. There has been a growth in expenditure and the number of recipients since 2002 when there were under 1 million recipients. The figure is now up to almost 1.5 million. The number, as well as the amount, has moved enormously. This year we will spend €20.25 billion on a wide range of schemes and services. At the end of May there were almost 1.5 million people in receipt of a weekly payment in respect of 2.3 million beneficiaries, as well as a further 614,000 families in receipt of a child benefit payment for more than 1 million children. The scale of these numbers means that our payments affect everybody in the State.

I would like to make some general economic points on social welfare. The immediate impact of the social transfers we make is on poverty levels. Social transfers reduce the at-risk-of-poverty level in the State by more 60%, which is unique in that it is the highest in the European Union. The second impact of our expenditure, which is sometimes forgotten by economists, is the contribution that €20 billion makes to the country's economic recovery. The spend of the Department immediately puts money in the tills of almost every business and shop in the State, as our customers spend their benefits and pensions each week, thereby maintaining domestic employment and economic activity. Protecting core weekly rates makes absolute sense not only from a from a poverty prevention perspective but also for the economy generally at a time when consumer confidence remains depressed.

No decisions have been made on measures for inclusion in budget 2014. The substantial discussions with my colleagues have not begun. The Department is working intensely on all of these headings, but the substantial discussions have not begun in earnest because as members will know, many members of the Government were extremely busy during the Presidency of the Council of the European Union. This Department will play its part in achieving the overall goal of the Government to put the Government finances on a sustainable footing. It essential that the forthcoming budget have regard to the importance of the impact of social welfare expenditure on reducing poverty and the wider economy. I held a pre-budget forum last Friday in Dublin Castle and 37 organisations, covering the principal advocacy and service provision organisations, attended. They outlined some of their priorities. I have also met many of them in private since Easter to look at their budget priorities.

I refer to the economic impact of what the Department does. Studies in America have shown that the most important stimulus the American economy received was when there was an extension of the payment of welfare benefits to people who were unemployed. All of the standard economists in the United States showed this. European studies by counterpart committees show that social welfare is key, or is what economists call a Keynesian stabiliser, injecting money into the economy which people spend in shops. As members know, money makes the world of economics go around. It is important to remember that this Department is critical in that regard.