Mary Hanafin (Dún Laoghaire, Fianna Fail)

This year, however, tax receipts have fallen dramatically. As a result, Ireland is now borrowing €400 million every week, mainly to pay for welfare, health and education. Unless we reduce our loans as a country, not only will we be obliged to pay substantial interest in the future, we will face the real prospect that international banks will not lend us any more money, on foot of which it then would be necessary to make other decisions. The Government's choice, therefore, was either to cut spending by a relatively small amount now and get borrowing under control or to risk being in a far worse position next year and then to be obliged to make much harsher cuts in welfare payments. This was not an easy choice and was not a decision that any member of the Government took lightly. However, they knew that were the Government to shirk its responsibility to take the necessary but painful steps required to reduce the level of public expenditure, it would be putting at risk all the gains achieved in recent years.

The budget set out that the Government's major priority is to get people back to work. I accept this is the best way in which to reduce the social welfare budget. This is the reason that, proportionately, Ireland has the largest capital programme of any country in Europe. It will keep 60,000 to 70,000 people working in the construction industry. In addition, measures that were included in the budget, such as the retrofitting programme, investment in tourism and the food industry, the enterprise stabilisation fund and the PRSI exemption for employers, constitute a jobs stimulus. Hopefully, they will serve to reduce the social welfare budget even further next year.

Nevertheless, the Government was forced to make reductions and Members will be aware of the main areas in which reductions are being made. Within such reductions, the Government sought to protect as many people as possible. While child benefit is being cut by €16 per child per month for all children, full compensation is being provided to more than 420,000 children in families who are dependent on welfare payments or who are in receipt of the family income supplement. The weekly rates of payment to those aged under 66 are being reduced by approximately 4.1%, or an average of €8.30 per week. The reduced rates of payments will apply to new jobseeker's allowance claimants aged 24 and under who are not in training or education. Reduced rates will also apply to jobseekers of any age who unreasonably refuse offers of training or education or who turn down a job. The treatment benefit scheme is also being limited in 2010 to free dental and optical examinations and the medical and surgical appliances scheme only.

While I will return later to the subject of fraud, additional fraud and control savings of €33.3 million or a total of €533 million, are being targeted for 2010 through enhanced targeting of particular schemes and the introduction of the new anti-fraud powers provided for in the Bill debated in the House last week. In addition, savings of €20 million are expected to result from reductions in the maximum rent levels for new or renewed rent supplement tenancies. While this issue was raised in the Chamber this evening, Members should not be under any illusion but that the RAS scheme also costs the Exchequer money.

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