Joan Burton (Dublin West, Labour)

In its second emergency budget since it came to office, the challenge for the Government is to find the way out to perform one more U-turn. For a Government that does so many U-turns, particularly on budgetary matters, this should not be difficult, especially as my colleague, Deputy Shortall, has given the Minister detailed argument as to how taking some interest relief from landlords would more than pay for and cover this cut.

The Holy Week emergency budget has been haunted by the ghost of Christmas future. Removing the Christmas bonus will cancel Christmas for tens of thousands of pensioners, carers and others who have come to rely on it to supplement what are for the most part meagre and modest Christmases. Many older people use the additional Christmas payment to buy presents for their grandchildren. This is part of being an active citizen and yesterday I saw the former Minister of State, Deputy Hoctor, launching the Bealtaine Festival that celebrates creativity in older people. Everyone recognises that the active engagement of older people, and old age pensioners in particular, in plotting and planning small gifts for children, grandchildren, nieces and nephews constitutes a huge part of their social life from September onwards, when the pre-Christmas shopping season begins. For many people, the Christmas bonus will put a turkey on the Christmas dinner table. The Christmas bonus is a much-needed financial lifeline and not a frivolous bonus that is akin to not buying a Prada handbag because one has lost a couple of thousand euro in tax. This issue is at the core of many people's lives.

As for economic stimulus, Paul Krugman, the Nobel laureate who commented on how he did not wish to see America go down the Ireland route, wrote about European economies recently and made the point that social welfare in European or social democratic economies constitutes an important form of economic stimulus because it keeps minimum levels of income and spending capacity in the economy in a manner that obviously does not happen in the United States. While I do not know whether the Minister has conducted scientific studies in this regard, the vast bulk of the Christmas bonus is spent locally in local shops. As my colleague, Deputy Shortall, has noted, this cutback could be paid for by restrictions on landlords' interest relief. Much of the landlords' money goes abroad, whereas the pensioners spend the money in their local shops and with local businesses.

Moreover, many pensioners will now take the train to the North to do their shopping there, to make whatever little savings they can. The Minister may have seen the recently broadcast RTE "Prime Time" programme, which showed that for shopping which cost approximately £160 north of the Border, the equivalent cost for exactly the same items in a southern supermarket was approximately €280. A pensioner who takes the train to the North probably can save the Christmas bonus equivalent by shopping there. However, that is not what the Government wants to happen. I have heard the Taoiseach, the Minister for Finance and other Fianna Fáil Ministers suggest that people might be patriotic by shopping locally and in the Republic.

I also was shocked when the Minister for Social and Family Affairs confessed recently that the control process in her Department to target social welfare fraud had collapsed for a time in the recent past. The Minister acknowledged a loss of approximately €50 million in respect of the Department's long-standing fraud control procedures because the Government could not get its act together. It took experienced social welfare staff, such as inspectors, from fraud control measures and put them to handling claims. This is at a time when the Government tells us there are civil servants in various Departments who could be redeployed. It seems an extraordinary act of bad management by the Minister that she should partially abandon control measures to the extent that she publically acknowledges, in parliamentary questions, and up to €50 million has been lost by the failure to continue routine and expert checking by social welfare inspectors in respect of deterring fraud and clarifying and confirming the identity of claimants. It is astonishing.

I offer the following to the Minister as a way out of her difficulties. If she takes an active interest in her Department and revisits the control measures, I predict she could make the savings and restore the Christmas bonus by that alone. Just as we are talking about going after delinquent bankers and tax defaulters, we need to ensure there is no sense that social welfare fraud is being tolerated because inspections are being abandoned. We have had enough of that on the tax side, where there has been a significant limitation on the number of inspections to deter tax fraud. Claiming entitlements to which one is not entitled is a serious breach of the social contract and a cost to law-abiding taxpayers that they should not be asked to carry. It undermines confidence in the social welfare system and in the tax system if Ministers acknowledge that control measures break down and that some people may be able to claim benefits to which they are not entitled. Rather than relying on tip-offs about welfare fraudsters, the number of anti-fraud checks should be increased. Like tax evasion, welfare fraud may have been acceptable during a time of economic plenty but we cannot allow social solidarity to be undermined by what people on very modest incomes paying many extra taxes and levies feel is being taken out of their pockets simply by the failure of competent management on the part of the Minister.

We have seen this Government row back on measure after measure in the past six months. The bank guarantee was to be the cheapest in the world, at no cost to the Irish taxpayer. That was followed by recapitalisation, then nationalisation of Anglo Irish Bank, a second recapitalisation and, as of yesterday, a third go at recapitalisation. Some €3.5 billion was not enough for a bank that said it would die if it had to raise extra capital. Yesterday, the Minister blithely announced an extra €1.5 billion for AIB. The levy was first to be on all incomes but is now on incomes over €15,000. The over-70s medical cards were to be withdrawn from all seniors but then they were not. Following a question from my colleague, the leader of the Labour Party, the pension levy became tax deductible overnight. The Government is full of examples of U-turns over the past eight months. All the Minister has to do is put together a plan, as suggested by Deputy Shortall, by curbing tax relief on interest for landlords or going after social welfare fraud and then she can restore Christmas to pensioners, carers and to people who are long-term unemployed, and let them have that little bit of cheer at Christmas.

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