George Lee (Dublin South, Fine Gael)

In terms of delivering reductions in welfare, this section of the Bill is something to be ashamed of for Members on the Government side. It is presented as a cut of 4% in the social welfare rates for adults but no account is taken of the cut that cancelling the Christmas bonus represents, which will be repeated next year. This brings the amount to a 6% cut in the net disposable income of the people who have the least. People may argue that the rate of inflation is -6% but we all know that many people on these levels of payments from the social welfare system do not generally have high mortgages, nor do they benefit from the items that came down in price in the same manner as those at the higher end. They certainly do not benefit from the ministerial pay increases. Ministerial pay has been cut by 5% before tax in this budget. After tax, it is much lower. The axe is falling on these people, who are at the bottom of the pile, who need support and are dependent on the State to protect them at the time of enormous economic crisis. Instead of support, the ground is pulled from under them.

It is extremely distressing for anyone who is on a low rate of social welfare payments to find that the rate is to be cut even further. All social welfare payments are low in comparison with the cost of living. Every economic study shows that levels of inequality in any society grow considerably during recessions. One of the functions of a social welfare system is to protect society against the consequences of that inequality. Studies have also shown that typically in Ireland, without the social welfare system, approximately 43% of the population would be living below the poverty line but the effect of the system is such that approximately 14% to 15% are below the poverty line. We should be proud that the system does what it is supposed to do, redistributes wealth from those who have it to those who need support. We should work towards pushing that further.

Cutting the rates of social welfare for people to whom the economy gives very little while others in very well-paid jobs have not felt any impact in this budget is despicable. We will increase inequality and poverty. Studies show that 25% of people on disability payments live below the poverty line. The Government is cutting their income by another 6%. No thinking person would feel proud of this.

Recent reports have shown that arguably €2 billion is lost to the social welfare system through fraud. People who are clever are able to get fake PPS numbers, or to rent them. There were very few controls in the system. If the level of fraud is one in ten, as some people in the public arena have recently suggested, that would amount to €2 billion of social welfare spending going a-begging which has not been looked after, collected and on which no one has clamped down for the State. That the lowest payments for adults in the social welfare system are to be further cut while we let that waste go is despicable and not something of which we can be proud.

We should do our utmost to ensure that this section does not go through. It is hard to sell to people who feel that this country and society have given them so little. There are very few jobs being created for people on the dole. They may well find themselves trapped in unemployment and those with disabilities who find it hard to get jobs in the first place will find it even harder to do so. The situation is getting worse.

During the big recession, in the 1980s, 46% of those who became unemployed became long-term unemployed. It is a serious threat to people that the social welfare system, which they hoped would support them, will not do so. Many have paid for years into social insurance and received very little from it because the economy was booming. Now when it is not booming the benefits of their contributions are being taken away, not just their dental benefits but the core benefit, what they have to fall back on if they become unemployed, is subject to a deliberate and up-front cut by the Government. That is a disgrace and we should not support this section at all.

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