Mary Hanafin (Dún Laoghaire, Fianna Fail)

In the context of tough decisions having to be made across the entire range of Government expenditure, social welfare has been prioritised in this supplementary budget. Almost €21.3 billion is being provided for welfare services in 2009, which represents an increase of €1.7 billion, or 8.7%, on the amount originally provided for in this year's budget and it is €3.6 billion or approximately 20% higher than the amount spent last year. Unfortunately, most of the additional expenditure will be required to provide income support to the increasing numbers of people who are losing their jobs and becoming unemployed. In the October budget, provision was made for the additional expenditure that was expected to result from an average live register of 290,000 in 2009. However, the scale of the increases in unemployment experienced in recent months means that an average figure of 440,000 is more likely and that is being provided for at an additional cost of €1.97 billion. This cost is being partially offset by savings of €300 million, the details of which I will outline later.

Following this supplementary budget, total gross spending on social welfare is expected to account for 29% of gross total Government expenditure in 2009. Putting aside borrowing, the social welfare expenditure provided for will account for 60% of Exchequer current revenue from tax and other sources. In other words, 60% of all Exchequer revenue will be expended on social welfare. At a time Government expenditure must be controlled as much as possible, this significant investment in welfare is a demonstration of our commitment to protecting the vulnerable and helping those who rely on the State for their basic income.

The Government faced difficult decisions in this supplementary budget. With welfare expenditure increasing at a rapid rate, both taxes and borrowing have to be increased to pay for it. We have done that and we have avoided welfare cuts as far as possible but it was simply not possible to avoid them altogether and the hard reality is that if some cuts were not made now to keep the welfare budget at a level the State can afford, much greater cuts would have to be made later. In the end, it was agreed that €300 million would be saved through a number of measures.

Our first priority was to save as much as possible by reducing the incidence of social welfare fraud. The target for control savings set at the beginning of this year was more than €500 million but we expect to make additional savings of €82 million this year as a result of improved controls. The public have welcomed the initiatives I have taken to clamp down on abuse of our social welfare system. Last July, recipients were asked to collect their money in person on a weekly basis at the post office. In addition, the cross-Border multi-agency approach to make sure people were not crossing the Border to claim unjustifiably in this jurisdiction and the recent initiative to require people to produce photo identification when collecting their money will ensure we counteract people coming into the State and claiming money to which they are not entitled.

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