Martin Mansergh (Tipperary South, Fianna Fail)

-----about it being heartless, savage and hitting the poorest of the poor. It was done, defended and voted on, even by as passionate a person as Deputy Michael D. Higgins, during the mid-1980s. Sometimes the rhetoric we use in this House is overblown and not particularly consistent with what was done by parties in government.

As we know, the public finances are very stretched at the moment. One of the reasons they are stretched is the economic situation. The rise in unemployment is leading to the social welfare bill being €21.3 billion, which is approximately 30% of the budget on the expenditure side. It is an 8.7% increase on what was envisaged last October and a 20% increase year on year. These figures were contained in the Minister's speech. Maintaining those levels of payments in current circumstances is a real achievement by the Government. By and large, this is recognised outside the House. The vast majority of the criticism of the budget, including in this House, has been that it is so-called hammering the middle classes and the coping classes, and all the rest of it. There is an implicit recognition that the social welfare system has been largely protected. I make a point in passing that my office, the Office of Public Works, is working with the Department of Social and Family Affairs on increasing and improving accommodation for applicants in the current situation.

Among the measures in the Bill is a substantial increase in the employee PRSI ceiling. There is no ceiling on the employers' side. By definition, that affects the better off. It is a form of solidarity. It has been quite a sharp rise but many commentators advocate that the ceiling should have been lifted altogether.

I would take the view, and I thought I heard such a view being tentatively expressed by the Labour Party spokesperson on finance as an initial reaction on budget night or the following day, that the reduction in the job seeker's allowance payment to the under 20s might not necessarily be such a regressive matter. We do not want people at that young age to habituate themselves to being unemployed.

I again compliment the Minister of State, Deputy Barry Andrews, on the substitution of a pre-school year for the early childhood payment. Listening to Deputy Higgins, one would never know that it had been Labour Party policy for some years to have an extra pre-school year. I believe it is a concrete substitution of a money grant which, of course, could be expended on any purpose, with something from which children will definitely benefit.

As with all housing subsidies. there is a tendency for the rent supplement at whatever the level to be used to the benefit of the landlord. Part of the intention with this change is to put downward pressure on rents. I am very pleased, as are people in my constituency, that the carers allowance was left untouched.

This is the centenary of the introduction of the old age pension in 1909 by David Lloyd George. Our social welfare system has made considerable progress since that date. Unemployment assistance was introduced by Fianna Fáil in 1933. Children's allowance was introduced by Seán Lemass in 1944. In the late 1960s and early 1970s Charles Haughey introduced the free schemes. In a position of bipartisanship, I acknowledge that after we joined the EEC the Fine Gael and Labour national coalition Government made substantial improvements in social welfare payments. In the turbulent years from 1980 to 1982, there were three years when there were 25% increases albeit at a time when inflation was in the high teens. None the less, that was a commitment. After 1987 there was implementation of the Commission on Social Welfare recommendations, which the previous Fine Gael and Labour Government had claimed was unaffordable. After 1997, pensions and child benefit were increased. The old age contributory pension in 1997 was £78 and today it is €230. Child benefit was £30 and is €166 today, which is a very substantial increase.

An article in today's edition of The Irish Times expresses deep dissatisfaction with the political system. From time to time people suggest that if only we had bankers, economists and philosopher kings in government how much better the system would be. Fortunately today not many people will recommend putting bankers into government - not after what has happened. I remember in 1987 when Charles Haughey was at a bankers' dinner and one of them recommended putting a couple of bankers in as Ministers, he said to them: "You look after your business and we'll look after ours." The problem is a misunderstanding of the nature of politics. It is not just about finding what is the right decision but actually making it happen and persuading people that it is the right way to go. As the man who first introduced the pension, David Lloyd George, told Irish negotiators during the treaty negotiations: "The politician who thinks he can deal out abstract justice without references to forces around him cannot govern."

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