Joan Burton (Dublin West, Labour)

I wish to share time with Deputy McManus.

It is always enjoyable to hear Deputy Kennedy contributing if that is what it can be called. Since 1996, the social insurance fund has been in surplus, as the PRSI contributions from employees and employers exceeded the payouts to people claiming social welfare or pensions. However, the Government's mismanagement of the economy has landed us in a serious and deteriorating position in respect of the fund. This year, because of increasing unemployment, it is expected the fund will have an annual deficit of €223 million and that the deficit will be at least €900 million in 2009. In other words, the shortage in income compared to expenditure will be €900 million. At this rate, the accumulated surplus on the fund could be exhausted by 2011. This year the Minister expected a surplus on the fund of €548 million but, instead, she anticipates a deficit of €223 million. This has grave consequences for future budgets and for PRSI.

The Government parties promised in their programme for Government to reform PRSI by abolishing the PRSI ceiling, currently €52,000, and reducing rates. Instead of reforming PRSI, the Government chose to introduce a 1% levy on all incomes, bar social welfare payments, below the minimum wage. Running the social insurance fund on to the rocks could have a significant impact on the unemployed and on pensioners expecting their contributory old age pension. I do not know whether the Government is planning callously to bequeath to the next Government a disastrous social insurance fund position.

Public accounting has collapsed in recent years. The Departments of Finance and Social and Family Affairs, have lost their ability to make accurate forecasts of economic activity, tax revenues or, in this case, the movement on the social insurance fund. There is a need for a public actuary, possibly based in the NTMA. He or she would prepare reliable, independent forecasts in respect of pension liabilities, unemployment liabilities and the contributions required to sustain a properly funded system. The Minister and the Government are asleep on the job regarding what is happening in the social insurance fund. It may well be that civil servants have advised the Minister but she chose to ignore what is happening to the fund. The fund was brought into surplus during the rainbow Government on a hard fought basis. When the Labour Party went into Government with Fianna Fáil in 1992, we inherited an unemployment rate of 18%. I served with the then Minister for Social Welfare, Deputy Woods, and, by 1996, when my party was in Government in the rainbow coalition, the fund was in surplus. That is being thrown away and the consequences of the deficit being built up by the Minister are horrendous for both the economy and people who rely on social welfare payments.

The absence of a single back-to-work measure in the legislation is remarkable, despite 100,000 people losing their jobs over the past year. I do not know how the Minister could produce a social welfare Bill that does not contain a measure to encourage people who must rely on social welfare for a brief period to move into education, training or employment. Are the Minister and her officials oblivious to the plight of the unemployed? Could she not find time to introduce even a single concrete back-to-work measure? In the current economic climate, that is not only an oversight but a dereliction of duty.

The Bill contains a serious number of new poverty traps, the impact of which the Minister and her staff have the capacity to analyse, avoid or to limit. The greatest poverty trap is rent allowance because people are barred from working if they are in receipt of this allowance or mortgage subsidies. Unfortunately, many men engaged in construction are losing their jobs and this is impacting on dual income couples. They often have mortgage repayments of between €1,600 and €2,000 per month. To obtain a mortgage subsidy or rent allowance, they and all the members of their household have to be unemployed and State dependent. Thus, many people at risk of mortgage default because of a combination of high monthly repayments, negative equity and shrinking employment prospects will be encouraged to go from work to welfare and not to return to work to maintain the roof over their heads. This is one of the most pressing issues facing the Minister and her Department. This is a policy failure on her part, which will have negative social consequences. If people are unemployed for more than a year or two, it becomes endemic in families and then it becomes intergenerational. We will be back to where we started in 1992 with many areas in which unemployment is intergenerational.

I refer to the measures relating to people involved in agriculture. Many people in the west are part-time farmers and they were involved in the construction industry. They are becoming unemployed and the Government is cutting the farm schemes which allowed part-time farmers to work in construction. I am from Dublin city centre and what I know about farming would fit on a postage stamp but the Government's proposals will save very little and they make no economic sense. People will be driven back into social welfare rather than allowing them to maintain an individual income.

The Labour Party has published detailed proposals for back-to-work and education schemes, including a national insulation scheme, which would also address our carbon emissions rather than the limited, small project put forward in the budget. We also proposed a school building programme with important consequences and benefits not only for people living in towns and working in the construction industry but also for people living in rural areas. Many people becoming unemployed in the construction industry have the skills which, with training and upskilling, could become the engineers, technicians and IT consultants of tomorrow. However, the Minister's legislation does not have a visionary element, as it proposes to restrict rather than encourage.

The message from the Government is loud and clear. Fat cat bankers get bailouts, property developers get tax breaks but the people on the bottom rung of the economic ladder get a kick in the teeth. Unfortunately, the Minister is like the Grinch, stealing Christmas from thousands of hard pressed families across the country.

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