Regina Doherty (Meath East, Fine Gael) | Oireachtas source

I thank the Chairman and members for the invitation to meet with them today. I look forward to working constructively with them in the weeks, months and years ahead. As they have requested, I will outline my priorities in the Department of Employment Affairs and Social Protection, including those arising from the expansion of the Department's remit into employment affairs. I will also, as is normal at this time of the year, outline how the Department is performing against the 2017 budget allocation, but I am keen to listen to members' views and what they see as the key issues for employment affairs and social protection in the years ahead.

It would be useful, in the first instance, to outline the scope and scale of the Department’s expenditure and its importance for millions of citizens in our country. An allocation of €19.85 billion was provided for the Department this year. This represents 37% of gross current Government expenditure. To the end of August, expenditure was just over €13 billion and is very close to target for the year to date.

Each week, about 1.35 million people, including pensioners, people with disabilities, people on maternity or sick leave, carers, and jobseekers, receive a payment from my Department. In addition, over 626,000 families receive child benefit each month for almost 1.2 million children. What is significant about these figures is not just their scale, but what they represent, which is a social contract where the State, on behalf of all our citizens, provides supports to those of our citizens who, for whatever reason, need help at certain times in their lives.

As the members are no doubt aware, there can be a misconception that most welfare payments go to the unemployed. That is simply not the case. The biggest single block of expenditure in 2017 will be on pensions, which will amount to approximately €7.3 billion or 37% of overall expenditure. Expenditure on working age schemes comprises two programmes, income supports and employment supports, which combined account for about €4.6 billion or 23% of total expenditure. Income supports, including jobseeker's payments, one-parent family payments, and maternity and paternity payments, account for almost €3.7 billion or 18% of overall expenditure. Expenditure on employment supports, including community employment, back to education-enterprise and various employment programmes, amounts to just under a €1 billion or 5% of my Department’s expenditure.

The next biggest expenditure subhead relates to illness, disability and carers' payments, which will amount to just over €3.8 billion or 19% of expenditure in 2017. Expenditure on children and families will account for nearly 13% of expenditure or €2.6 billion, of which €423 million will be spent on the family income supplement, FIS, paid to low income working families. Expenditure on supplementary payments like rent supplement, agencies such as the Citizens Information Board, CIB, the Money Advice & Budgeting Service, MABS, and miscellaneous services accounts for €863 million or 4% of our expenditure. Almost all of the expenditure incurred by the Department is demand led. The demand is driven by demographic trends, including an ageing population and economic factors such as developments in the labour market.

As we all know, Ireland has experienced a recovery in employment that has been much more rapid than even the most optimistic analysts projected. There are now more than 2 million people in employment, with over 48,000 net new jobs added in the year to the end of the second quarter. As a result of this growth in employment, the Central Statistics Office, CSO, data shows that the unemployment rate estimate stands at 6.1% for August, almost nine percentage points lower than its peak level of just over 15%. Long-term unemployment stands at 3.1%, which represents a great reduction of 27,000 people over the year. Youth unemployment has fallen to 16.5%, down from a peak level of over 30%.

These trends in unemployment have fed into the live register, which now stands at just over 248,000 people. There are now over 42,000 fewer people on the live register than the same time last year and 84,000 fewer people than this time two years ago. The ongoing fall in the live register is freeing up resources we need to meet rising demand in other areas, for example, pensions, people with disabilities and carers. We estimate that we will need another €180 million in 2018 for increasing numbers of pensioners as our population ages.

The question I and my Government colleagues are now considering is how we build a sustainable budget over the coming weeks that will benefit all our people, young and old, rural and urban, and to do so in a way that it does not spread resources too thinly so as not to make any difference.

There are a number of developments in 2017 that I would like to mention. The back to school clothing and footwear allowance was increased this July by 25%, from €100 to €125, for children between the ages of four and 11 and from €200 to €250 for children aged 12 years and over. That brings the total allocation for the allowance this year to €47.4 million, an increase of €10 million on what was originally proposed for 2017. The total number of families who have been supported under the scheme this year to date is 139,170. The scheme remains open until 30 September and the Department is continuing to process applications.

A Government decision was made in June to increase the weekly rate of direct provision allowance for children from €15.60 to €21.60 per week, while the weekly rate for adults increased from €19.10 to €21.60 per week. These increases took effect in August.

As was the case in the past three years when, due to the continuing improvement in the State's financial position, the Government was ultimately in a position to pay a Christmas bonus, there is no provision for a bonus in the Department's allocation for 2017 currently. However, I will continue to monitor the financial position and consult my colleagues, and I am hopeful that we will be in a position to pay a Christmas bonus again this year.

The Taoiseach announced to the Dáil on 15 June that labour affairs and labour law responsibilities would transfer from the then Department of Jobs, Enterprise and Innovation to the then Department of Social Protection. At a national level, the following employment policy and legislative functions have transferred to my Department: employment rights policy and legislation; the Low Pay Commission; and legislation on the national minimum wage and related areas. At EU and international levels, the following employment policy functions are now the responsibility of my Department: a lead role in, and co-ordination of, the Employment, Social Policy, Health and Consumer Affairs Council, EPSCO; the Employment Committee, EMCO, and the EU semester process; the response and input to the EU pillar of social rights; engagement with the European Foundation for the Improvement of Living and Working Conditions, Eurofound; and the Council of Europe and co-ordination of responses on the Social Charter.

The details of the employment legislation that transferred to my Department following the Government decision are set out in the Labour Affairs and Labour Law (Transfer of Departmental Administration and Ministerial Functions) Order 2017, SI 361 of 2017. The transfer of functions involved 11 pieces of primary legislation in the area of labour affairs and labour law. The Department's name has changed to the Department of Employment Affairs and Social Protection to reflect these new responsibilities.

The transfer of these functions to the Department reflects the close linkages between the welfare and activation remit already in the Department and the operation of the labour market. As members of the committee will be aware, the conditions for receipt of in-work income supports, unemployment benefits, illness and disability payments, and pension and child support payments reflect and influence how the labour market operates. Bringing responsibility for employment affairs and social protection together under one Minister recognises this reality and will help to ensure, for example, that developments in respect of minimum rates of pay, working hours and illness absences within the workplace will be co-ordinated with the relevant State welfare supports. This will be a new challenge for our Department and is one that I am looking forward to leading in the months ahead. I am pleased to say that 13 staff from the former Department of Jobs, Enterprise and Innovation joined us this week. I welcome them and hope that they have a long and happy time with us.

In the immediate term, my priority is to publish the employment Bill, which is being drafted. The committee is aware that the Bill is in response to a commitment in the programme for Government to tackle the problems caused by the increased casualisation of work and, in particular, to strengthen the regulations pertaining to precarious employment. The proposals contained in the Bill are the result of extensive consultations. They include public consultation following the University of Limerick study of zero-hour and low-hour contracts, in addition to detailed dialogue with ICTU and IBEC for several months. I have met IBEC and ICTU in recent weeks to hear first hand their concerns and ideas. The Bill aims to address a number of issues that have been identified where current employment rights legislation can and must be strengthened to the benefit of employees, particularly low-paid and more vulnerable employees, without imposing unnecessarily onerous burdens on employers and businesses. That is the trick that we must get right.

Looking ahead to the budget in the next couple of days, the programme for Government contained a number of commitments on employment affairs and social protection. These include increasing payments, such as pensions and carer's and disability payments, in line with inflation. We have already met this commitment through the increases granted in the 2017 budget, but we will review what more can be done in the context of this year's budget parameters. Any change in this regard will have to take account of other priorities, including improving payments to working families on low incomes and tackling child poverty, particularly in single-parent households.

In finalising proposals, I will have due regard to the output from the Department's annual pre-budget forum, which we held on 21 July in Dublin Castle. The forum enabled me to listen directly to the concerns and views of more than 45 NGOs, including advocacy and representative organisations. This was worthwhile from our perspective as well as theirs. It provided useful information to my officials and afforded me a great insight into the competing priorities in the welfare spending and employment affairs parts of our portfolio.

Although the fiscal space available for budget 2018 is yet to be finalised, the summer economic statement indicated that there would likely be less than €500 million of fiscal space available for new expenditure initiatives across all Departments' budgets in 2018. In this context, it is worth noting that a €5 increase in all weekly payments would cost €350 million, which would absorb most of that fiscal space. As such, I would welcome input from the committee as to what it believes are the main two or three priorities that my Department should be concentrating on in budget 2018. I look forward to this dialogue and to hearing members' suggestions and inputs.