Mary Hanafin (Dún Laoghaire, Fianna Fail)

In that context, much as though the Government would prefer to avoid so doing, it is appropriate to consider the €2.5 billion being spent this year on child benefit. As I noted earlier, the rate of child benefit paid to all families has increased dramatically in recent years. In 2000, parents received €53.96 per month for each of their first and second children. Today, they get €166 per child every month. In 2000, the rate paid for each of the third and subsequent children was €71.11 per child per month, while the current rate is €203 per month. In the same period, overall expenditure on child benefit has grown to more than €2.5 billion.

The Government is proud to have been able to deliver such significant increases in payments to families when the resources were available. It also is proud that, as a result, child income support for parents in Ireland now is far higher than in many other European countries. However, in the current economic environment, it simply cannot afford to keep spending at the same level as it did when its tax revenue was much higher. In its recent report on the Irish economy, the Organisation for Economic Co-operation and Development, OECD, acknowledged that while the amount of resources spent on social protection had been comparatively small in Ireland in the past, there has been a significant increase in the generosity of welfare provision over the last decade. The OECD singled out the fact that child benefit had increased by a factor of almost four since 1997 and noted that Irish child benefit and other social welfare benefits are now high by international comparisons, particularly with respect to the United Kingdom. More generally, the OECD suggested that the universal payment of benefits which are not related to household income should be reconsidered.

In considering how changes might be made to child benefit, the Government is conscious that different families rely on this payment for different reasons. Families reliant on basic welfare payments such as the jobseeker's allowance or those on low wages are likely to use their child benefit to help put food on the table or to put shoes on their children's feet. Families on middle incomes with large mortgages may rely on their child benefit to meet relatively basic needs. For many women, child benefit supports them working outside the home by providing a significant contribution towards their child care costs. In addition, for some women in high-income households, child benefit may be the only income that is paid directly to them. The Government appreciates, therefore, that child benefit can be an important source of income for all families for different reasons and its deliberations on the future of the payment are being informed by this understanding.

Members will be aware that the Commission on Taxation recommended in principle that the child benefit payment should be taxed, while the McCarthy group recommended an across-the-board cut in child benefit payment rates. However, the Government's deliberations on the welfare budget are not simply being informed by analysis and proposals from the aforementioned groups alone. They also are being influenced by the understanding each Cabinet member has, both as a Minister and as a constituency Deputy, of the real difficulties facing families at present. As Minister for Social and Family Affairs, I have met a wide variety of groups recently to listen to their views about the forthcoming budget. As part of these discussions, I have listened to the views of groups such as the Society of St. Vincent de Paul, the National Women's Council of Ireland, the Children's Rights Alliance, as well as CORI and Social Justice Ireland in respect of child benefit. The views of these and other groups have informed my Department's consideration of potential changes in this area. Obviously, Members must wait until the budget to ascertain what the Government's final decision will be. I can assure the House, however, that in considering all the options, the Government is determined to find the fairest way of achieving savings, while protecting those on low incomes as much as possible.

The motion before the House tonight also specifically refers to child care. This has been an issue on which the Government has been increasingly proactive in recent years. Under the Equal Opportunities Childcare Programme 2000-2006 and the National Childcare Investment Programme 2006-2010, funding has been approved which will result in the creation of approximately 65,000 new child care places. The evidence available to the Government is that previous shortfalls in centre-based child care now have been met despite a large increase in demand due to rising numbers of women at work and immigration. A survey released by the National Children's Nurseries Association last year suggested that the average fee for full-time day care had fallen slightly since 2007. Current indications available to the Office of the Minister for Children suggest that fees have fallen further this year, as one would expect at a time of deflation. When combined with the reductions in fees for children supported by the community child care subvention scheme and the benefit of the new free preschool year, child care costs are falling for parents.

The Minister of State, Deputy Barry Andrews, who will speak in this debate tomorrow, leads me to understand that the preschool sector now believes that any further significant creation of places will cause oversupply. As a result, the emphasis has shifted from capital funding for additional places to current funding with a view to improving the quality and accessibility of existing provision. While the early childcare supplement will be abolished from 1 January 2010, it will be replaced with a free preschool year in early childhood care and education, ECCE. This scheme has been widely welcomed by child care experts as a positive step in targeting support in a way that will directly support the child. Under the new ECCE scheme, services in the community and commercial child care sectors will provide a free preschool year to children in the year prior to junior infants, in return for a weekly capitation of €64.50 over 38 weeks. There will be five sessions of three hours' duration each week and services will be required to meet the standards set out in Síolta and Aistear. Síolta will have a co-ordinating role and the county child care committees will support the providers in meeting these standards. In cases in which a child attends full day care in a crèche, the Government will pay €48.50 weekly over 50 weeks in return for a 2 hour and 15 minute session each day, with a consequential €48.50 reduction in the child care fees charged of the parents. I am delighted the Government made the decision to introduce this new scheme. It will give equal opportunities to all children, particularly the most marginalised who would not otherwise be able to avail of preschool services. I believe the long-term benefits will be enormously significant to all our children and to society as a whole.

This new initiative represents an annual investment of €170 million in the provision of free preschool services and clearly demonstrates that, despite the current difficult economic environment, the Government is determined to maintain its commitment to the further development of early education and child care nationwide.

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