Brian Cowen (Laois-Offaly, Fianna Fail)

The McCarthy report recommended a 5% cut in all welfare rates. The Government, however, did not go down that road. It made a choice which seeks to maintain the real purchasing power of welfare payments against a background of a drop in the cost of living of 6.6% in 2009.

I understand and acknowledge welfare rates, irrespective of whether the €8.30 has been removed, are not easy to live on. In the interests of retaining the many hundreds of thousands of payments made every week and every year, the present position was not sustainable and adjustments had to be made. The adjustment made in the particular heading of expenditure in question was less than the other adjustments made in capital, programme and public service pay expenditure.

That was the choice facing the Government. It had to make those choices in as carefully a calibrated way as possible. I acknowledge people will receive a reduced rate of payment as a result. However, we are doing so to keep a sustainable system going, not on the basis that there was some easy choice. We have to come back to the fact that the country is spending far more than what it is taking in in revenues all the time. If we do not address this position, we will have an even greater adjustment to have to contemplate than has been the case thus far.

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