Michael Ahern (Cork East, Fianna Fail)

These include free natural or bottled gas, free travel, free ESB, telephone and television licence allowances and now if people want they can switch the telephone allowance to their mobile telephone.

When I was first elected in February 1982, unemployment figures were in the region of 18%.Those figures have reduced significantly, and were at zero for a number of years. All Governments which held office since that date have been responsible and played their part in ensuring our economy was able to change from those dire days to such a success in recent years.

We are not revisiting the days of the early 1980s but the numbers in receipt of social welfare are increasing and are predicted to increase to approximately 7% this year. As we are aware, this is due to the change in the world economy. What happens in the United States of America, the United Kingdom and throughout Europe has a serious impact on our economy. We are a small open trading economy and 85% to 90% of our GDP is obtained through exports. The United States of America is the recipient of approximately 19% of our exports, the United Kingdom receives 18% and the European Union receives 40%.

The strengthening of the euro against sterling and the US dollar has made it more difficult for exporters to keep up their market share or increase exports. The recession hitting many countries throughout the EU has also affected our exports. This means a reduction in profits which means a reduction in corporation tax and other taxes being received by the Government.

The construction industry has almost come to a halt in the past year or two, reducing from approximately 85,000 to 90,000 units to a projection of approximately 35,000 for this year. A reduction of every 10,000 units means a reduction of 1% of GDP. From a 6% growth rate last year, we are at a rate below zero this year.

In light of this, the funding available to the Government this year was nothing like what it had been in previous years. Despite this, the Government decided on three priority areas which it must ensure are looked after. The social welfare budget increased by 8.4%, the education budget by 2.7% and the health budget by more than 2%. We have always concentrated on these areas, even in the most difficult times, to ensure social welfare recipients, the elderly and those in education are looked after.

The budget allocates €515 million to social welfare. This level of social welfare expenditure indicates the Government's priority to protect and satisfactorily provide for social welfare recipients. Day to day social welfare expenditure predominantly benefits the elderly and children. The budget provides for an increase of €2 billion in expenditure in 2009. These positive changes propose an increase of €7 per week for people in receipt of a State pension in their own right, an extra €6.30 per week for the qualified adults of State pensioners aged 66 years and over and an extra €4.70 for contributory qualified adults under 66 years of age.

When the budget was announced we listened to scaremongering that older people would not be looked after, particularly with regard to the Christmas bonus. It was made clear that the Christmas bonus would be granted this year and I am delighted the Minister has announced it. In addition, the free fuel allowance has been increased by €2 per week and it has been extended by two weeks. The Minister is to be commended for listening to Deputies from all sides of both Houses who made the case for an increase in the free fuel allowance, particularly given the change in climate whereby the winter tends to be longer than it used to be.

I heard Opposition Members state the increase in the social welfare package does not sufficiently match the increase in inflation. This is not true because the projected rate of inflation for 2009 is between 2% and 2.5%. The budget provides for increases of between 3% and 4% in the basic payment rate. These payment increases are in line with wage rises agreed by the social partners in the second phase of the national pay agreement. The 2008 social welfare increases far exceed the increase in the consumer price index.

All of us have been visited by and have met constituents and we have heard about people who fly in from various parts of the world every month to collect their social welfare and fly out again. I do not want to mention any nationalities but we have also heard about people who leave the country and give their PPS numbers to other people who work here. I know the Department of Social and Family Affairs has taken this seriously and has put measures in place to ensure these scams cannot be carried out in future.

In this day and age, it is important to ask people who complain about this to provide details, as I do, so the information can be passed on to the Department. Once the information is provided the Department will carry out examinations. It is incumbent on all public representatives to put that message across to our constituents and to encourage them to provide us with solid information, rather than pub talk, so any abuses can be dealt with.

I welcome the decision to treat husbands and wives equally for pension purposes, particularly in the case of farmers and sole traders. Heretofore, one spouse, usually the wife, was not treated as a person in his or her own right for the purposes of pension entitlement even though he or she may have worked as hard as the other spouse in the family business. I am pleased the Minister has seen fit to correct this anomaly.

The proposal to cut child benefit by half in 2009 for children aged 18 years and over and to eliminate it in 2010 for this age group has caused great concern. It is important to reiterate the points made by the Minister in this regard. In her speech yesterday, she said:

Special alleviating measures are being introduced in respect of children aged 18 years who are in social welfare-dependent families or low-income families. A compensatory payment of €15 per week will be paid to families in receipt of social welfare payments which include a payment for a qualified child in this age group and to low-income families in receipt of family income supplement which include qualified children in this age group.

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