Timmy Dooley (Clare, Fianna Fail)

I welcome the opportunity to contribute to the Social Welfare (Miscellaneous Provisions) Bill. It is worth considering the size of the Bill and the cost to the State of €19.5 billion projected for 2009. As I understand it, that money supports around 1.7 million men, women and children in the State. Clearly it is not possible at this time for the Government to put in place the increases that would ordinarily be expected based on the growth rate of the economy over the past number of years. Notwithstanding that, the State has put an extra €2.6 billion into the budget this year to take account of the expected increase in unemployment. As most people in the House will know, the average number on the live register in 2008 was 220,000, while the projected number for next year is 290,000. The social welfare budget must take account of this and must put in place within the Vote the necessary funds to deal with the fallout. This has taken up much of the slack that might in the past have been used to improve some of the other elements. We must recognise that the rate of inflation has reduced considerably, and the increases in the rates of payment are commensurate with this. Therefore, while not as high as people would like, they are appropriate to deal with the increased costs faced by those 1.7 million people over the coming year.

Deputy Shortall spoke about the early childhood supplement and the fact that the scheme was being limited at five and a half years of age as opposed to six. I remember taking a keen interest in this measure when it was first introduced. Much of the talk was about a pre-school requirement for children and the call on the State at the time was to provide for children in advance of their starting school. To the best of my knowledge, most children are in school before they reach the age of five and a half; if not, they are exceptions to the rule. Many children go to school at four. This support was put in place to assist parents in providing for the relatively high cost associated with pre-school requirements for children. Therefore the five and a half years cut-off is appropriate. One must also take into account that the State has very heavily invested in the provision of child care places for children with particular needs. The approach to the provision of places is skewed towards children from lower incomes. Deputy Shortall talked about the need for child care coming from low income families. People having children do not necessarily come from the low income bracket. That is why the State's investment in the child care programme focuses on providing services for children from less well off backgrounds where the parents are primarily on social welfare. The needs are more than well addressed and it is right and appropriate that the new level be put in place. It saves money that can be used to better facilitate those in greatest need.

Deputy Shortall identified the monthly payment as a cost saving, but that money is not being squirrelled away for some other purpose. The requirement in the Department of Social and Family Affairs Vote for next year increases by €2.6 billion. While it is never easy for a Minister to have to recognise or develop changes in this way, it was the right thing to do. Money is not being taken from anybody; the scheme will end a little earlier than in the past.

The Social Welfare (Miscellaneous Provisions) Bill is a clear statement by the Government to protect the most needy and vulnerable in society, whether pensioners or the unemployed. We have targeted that well in this approach, notwithstanding the very significant change in the economy. The State is borrowing to meet current expenditure. We are raising less tax than we would have in the past and the difference is approximately €10 million per day. That is unsustainable in the long term. Some of the "nice to have" measures that were there in the past, in good times, were part of the Government's commitment when it had the available resources to put them into the identified areas. When circumstances change there is a requirement to fund the areas that are most in need and that is happening in the changes in this Bill.

It is important we recognise we face many challenges. The most significant challenge is to try to control the level of public spending without taking too much spending power from the economy, which will lead to a further recession. The Government's central approach is to try to limit spending while retaining the capacity for people to work towards reversing the downward trend and moving towards growth in the economy. We all recognise this is the only way to allow for the economy to provide for itself rather than depending on borrowing.

This phenomenon is not relevant only to Ireland. To everybody in this House who looks to other countries or who spends any time reading the national and international press, the problems we encounter are being encountered across the developed world. Some other jurisdictions, particularly the Asian markets, have seen very significant changes and downward growth patterns despite the fact they did not have the same level of development in their economy. A small, open economy such as ours will have suffered to a greater extent than many larger countries. It is only a matter of time before they encounter the same levels of difficulty we have. Growth rates happened for us more quickly than others.

The challenges we face require very decisive action. This Government has the necessary experience to manage the economy in these difficult times. It is about facing up to the difficult decisions and accepting that what happened in the past has been to the benefit of this country. However, we must arrest the decline in our tax intakes and look at spending in a much more careful way. The level of scrutiny put in place by the Departments of Social and Family Affairs and Finance is right. The increases in social welfare payments are generally in line with inflation. They are not as large as anybody would like to put in place, but it is important to manage the available finances as well as possible. The increase of €7 per week for all State pensioners, whether contributory or non-contributory, along with carers aged 66 and over from January 2009 is helpful. The jobseeker's allowance will increase by €6.50 per week, notwithstanding what Deputy Shortall said, bringing that to €204.30 per week.

It is difficult for people who have to survive on that kind of payment. While the small increase will not change their lives in any real way I am less concerned about those who have been managing on it to date. The biggest difficulty will be encountered by those who over the past number of weeks and in the coming months will find themselves out of employment. In some cases redundancy payments will help them over the hump, however many people will not have that level of security. They will find themselves going from having a relatively decent income to being, perhaps for the first time in their lives, dependent on social welfare. It is projected that approximately 70,000 extra people will go on the live register. The shock for them will be very significant and will pose major difficulties for the families, particularly those who have young children, mortgages and financial commitments.

I appeal to the banking fraternity to show a level of compassion and, perhaps, support to families which find themselves in those circumstances. The Government has taken a very proactive approach to dealing with the banking crisis by putting in place the necessary security to allow banks to trade themselves out of the difficulties which they got themselves into. Some banks suggest they find themselves in this position as a result of an international problem and that is partly correct. The lack of regulation that emanated from the United States and, perhaps, was followed in other countries allowed banks to neglect the necessary scrutiny of lending they would have carried out in the past. Given the nature of competition, this lack of regulation may have forced banks to follow this pattern. That has clearly caused problems. I appeal to the banks to look kindly on people who need their support.

While it is not clear what is happening in the banking sector, from talking to people on the ground, whether individuals or small businesses, the banks seem to be trying to find their own route out of the capitalisation issue. They seem to be moving on people or small businesses who have term loans and which they believe have the capacity to generate funds to pay off those loans in a shorter term than initially agreed. That is entirely wrong. In the near future the banks will need to be recapitalised. It is not clear how that will be done. As a last resort banks should expect the State to provide that capitalisation but I encourage the Government to give it consideration in the event that it becomes absolutely necessary. The banks' lack of capital reserves, particularly in tier one capital, to provide funds not just to small businesses but to individuals who find themselves out of work, will have a detrimental impact on our economy. The basic social welfare rate would not allow somebody who is employed, has a young family with all the associated financial commitments and is paying for his or her own home, to live in any kind of normal way. A requirement for debt will be associated with that.

We need to take an approach to the recapitalisation of the banks that prevents more people from coming onto the live register. There is a considerable necessity for the Dáil, as an elected body, to deal with the capitalisation of the banks. It is difficult to communicate that with the public. There is a perception among the public that the bank guarantee scheme that was put in place by the Government involved the bailing out of the banks. It is clear that was not the case. No State money has been put into the banks. The average person on the street believes that the State has bailed out the banks and the big builders and, in return, cut social welfare, taken medical cards from pensioners and done a whole lot of nasty things to school children. Much of that perception has been promoted by certain organs of the media. All of it sounds good, but none of it is true. There has been no bail-out of the banks. This Parliament needs to grapple with that perception.

We have to be in a position to communicate with the public the absolute need for the banks to be recapitalised in a way that allows for the orderly continuance of the basic commerce of society. People who experience particular life events — the loss of a job, or some requirement relating to the health of a family member — need to be able to access short-term loans from the banks. If we are to ensure we do not end up with more people on the live register, we need to enable banks to provide funds to small businesses, thereby allowing such businesses to continue as they have in the past.

The Bill provides for an increase of €2, to €20 a week, in the fuel allowance payment. While the increase is relatively small, it is important. The number of weeks for which the fuel allowance scheme will run each year will increase to 32 from April 2009, which is welcome. I hope the levelling off in energy prices we have seen over recent weeks will continue, as it would take some of the pressure from households this winter. The 300,000 householders who benefit from the fuel allowance scheme avail of a valuable payment. While we all agree that it is not enough, it is about as much as can be done in the current environment.

An increase of up to €6 a week, per child, will be provided for under the family income supplement scheme. The payment in question is particularly useful for those who find themselves having to take up lower-paid jobs as a result of the way the economy has gone. The qualified child payment will increase from €24 to €26. While it is not as large an increase as we would like to see, it is basically in line with the expected consumer price index for the coming year.

It is important that there will be an increase in the number of people who are eligible to claim the back to school allowance. The sad reality of the debate at present is that the teacher unions are motivating parents to be concerned about class sizes. It has to be recognised that it is an important issue. Parents are concerned about it. Those who will lose their jobs in the coming months will be concerned about how they will be able to dress their children as they go back to school next August and September. They will have to meet the basic needs of their children, such as clothes and books. That has not been an issue for many such people before now.

It is welcome that more people will be eligible for the back to school allowance. The time of the year when children return to school is a difficult one for some parents, particularly those who have not had to encounter this issue in the past. It is important that the Minister has announced that a double payment will be made to social welfare recipients this Christmas. People who are out of work, perhaps for the first time in their entire careers, will be under pressure this Christmas. The kind of advertising that is aimed at young people, in particular, puts a particular strain on families as they try to keep pace with their social peers. Anything that can be done in this regard is welcome and needs to be addressed. For example, credit unions and banks may be able to assist parents in getting through the Christmas period.

I welcome the decision to reduce the qualifying period for jobseeker's benefit from 15 months to 12 months for those with 260 contributions. As I understand it, the Government is aware of the need to protect and enhance the income levels of the less well-off in society. We continue to face serious social challenges. We need to work harder to improve the lot of the many people who continue to depend on social assistance.

It is clear that ordinary families are facing many pressures, some of which I have alluded to. Such challenges are much greater than they were in the past because we have experienced a record level of employment in this country. Many jobs were created in recent years as a result of the kind of approach that was taken in 1987. That approach, which was informed by the requirement for fiscal rectitude, was supported by almost all parties in this House. Most people agreed that it was important to get the finances of this country right. The same approach is part of the framework within which the recent budget and the Bill before the House have been put together. The underlying theme is the need to ensure we balance the books at the earliest possible point and work to try to rebuild the economy in line with developments at international level.

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