Michael Finneran (Roscommon-South Leitrim, Fianna Fail)

I thank the Deputies who have contributed to this debate, both last night and today. Members on all sides of the House are genuinely concerned about the impact the cancellation of the Christmas bonus payment will have on all long-term social welfare recipients, especially those persons who are unemployed and pensioners. The Government shares that concern and as the Minister, Deputy Hanafin, outlined in her speech last night, this was a difficult decision to make and one which would not have been made but for the current economic climate.

In the context of very tough decisions having to be made across the whole range of Government expenditure, the provision of €21.3 billion for social welfare services in 2009 - 20% more than the amount spent in 2008 - is a clear demonstration of the Government's commitment to protecting the vulnerable and providing income support to the increasing number of people who are losing their jobs. In the past decade there have been significant increases in welfare payments, with child benefit increasing from €44 to €166 per month; the State contributory pension increasing from €113 to €230 per week and the rate of jobseeker's allowance being raised from €93 to €204 per week.

The Government regrets that social welfare cuts had to be made but it was simply not possible to avoid them. Savings must be made in some areas of social welfare expenditure in order to keep the welfare budget at a level the State can afford this year and to absorb the additional expenditure on social welfare payments resulting from the sharp rise in unemployment. Cuts in social welfare have been kept to a minimum at just €300 million in the context of a 2009 budget of €21.3 billion.

In deciding where to achieve the savings in welfare expenditure there were no easy options and everything had to be considered, including a general cut in all weekly social welfare payment rates which the Government avoided. In fact, as recently as January 2009 weekly welfare rates were increased by the 3% plus provided for in the budget of October last at a time when 2.5% inflation was predicted for 2009. As Deputies are aware, the forecast has changed significantly with a drop of 4% in the consumer price index now expected for this year.

The payment of a full Christmas bonus in 2009 would cost an estimated €223 million. We appreciate that the decision not to pay a Christmas bonus in 2009 will be difficult for people even if it has been possible to give more than eight months notice to those affected, but we genuinely believe that savings in other areas of welfare expenditure could have caused greater hardship. The alternative of cutting all weekly payments would have a much greater effect on households.

In response to the Private Members' proposition that the required savings could be made through further fraud control and restriction on interest relief on rental property, the Minister confirmed in her speech last night that control measures are also being intensified to reduce the incidence of social welfare fraud and to effect savings. Those control activities will continue to be prioritised. Furthermore, the Minister for Finance provided in the supplementary budget for the restriction of interest relief for rental properties this year. In other words, it has been necessary to adopt a wide range of measures to address our unprecedented fiscal crisis. It is simply wrong to suggest that the cancellation of the Christmas bonus could readily have been avoided simply by taking other measures.

The Minister, Deputy Hanafin, indicated on budget day and again last night that if there is a financial windfall or additional savings then the bonus will be the first payment to be restored. What the Minister said is on record. I wish to conclude by assuring the House that the Government will reconsider the payment of the Christmas bonus as soon as we are out of the current economic situation. In the meantime we will do our very best to continue to help people who are under financial pressure.

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