Éamon Ó Cuív (Galway West, Fianna Fail)

I move: "That the Bill be now read a Second Time."

Last month, the Government outlined, in the national recovery plan, the blueprint for a return to sustainable growth in our economy. In particular, it sets out the measures that will be taken to restore order to the Government finances, and specifies the reforms the Government will implement to increase employment and accelerate economic growth. The plan is necessary to bridge the gap between Government expenditure and revenue which is currently filled by borrowing. Unless the rate of borrowing is reduced, the burden of debt servicing will take up an increasing proportion of tax revenue. This would mean that expenditure on vital schemes and services, such as those provided by my Department, would become increasingly unsustainable.

My Department currently accounts for approximately 38% of the total gross Government expenditure and therefore it is not possible to stabilise and reduce public spending without impacting on the Department's budget. Accordingly, the plan provides for significant reductions in expenditure by my Department over the next four years.

These will be achieved through the following: reduction in the live register through economic growth; more intensive labour force activation measures designed to help people get back into employment and therefore reduce live register costs; enhanced control measures in order to better direct expenditure only to those who need it; major structural reform of the welfare system in order to rationalise and simplify supports available to people of working age and to ensure there is always an incentive to take up a job; and through such reductions in rates of payment as may be necessary to ensure that the overall savings targets are met.

From my Department's point of view, our focus will be on enhancing the Department's current fraud and control measures to try to make the bulk of our savings there, on our labour activation measures, which would lead to a reduction in the live register, and on structural reform. If we can make substantial progress in these key areas, reductions in individual rates of payment can be limited over the period of the plan.

Budget 2011 is the first step in achieving the goals of the recovery plan. This will involve an €873 million reduction in expenditure by my Department. Even after this reduction, expenditure by my Department will still amount to €20.62 billion in 2011. As Minister for Social Protection, I am fully aware that the expenditure changes in this budget will affect the living standards of many citizens in the short term. However, if we put off these changes, there will be a much greater burden in the future on those who can least bear it, including people with disabilities, families with children, the unemployed, carers and pensioners. I assure the House that the Government, in the context of a very tough budgetary environment, has done its utmost to protect the most vulnerable people in Irish society. These savings for 2011 will be achieved through the following: greatly enhanced control measures; proactive labour activation initiatives, including the introduction of a brand new community work placement programme called Tús operated by my Department; structural reform measures designed to deliver more effective income and housing supports in a sustainable way; and reductions in rates of payment.

Before I detail the areas where changes are being made, I would like to outline the supports which are being fully maintained at their current levels, so as to provide reassurance to people who had been concerned that they might be cut. Similar to last year, we have been able to maintain pensions and other payments to people aged over 66 at current levels. This includes payments for pensioners' dependent spouses who are aged under 66. This means that approximately 490,000 people aged over 66 are being fully protected in this budget. Extra allowances which are paid to pensioners who live alone and those who are aged over 80 will continue at their current rates.

I have preserved welfare supports for pensioners generally as I believe that all pensioners are entitled to a minimum level of guaranteed support by the State. For many pensioners, social welfare pensions, be they contributory or non-contributory, are their only source of income and most do not have the ability to earn. However, pensioners who can afford to pay towards the economic recovery will contribute through the changes in the taxation system which were announced by my colleague, the Minister for Finance, yesterday.

A number of valuable other payments have also been fully maintained. These benefit not alone pensioners, but also people with disabilities, carers and all on low income regardless of age. These include the household benefits package, which includes the free television licence, electricity-gas allowance and telephone allowance, as well as the free fuel and free travel schemes. The half-rate carer's allowance scheme and the extra payment for caring for more than one person are retained as well as the respite care grant at its current value of €1,700 per annum. The half-rate illness benefit and jobseeker's benefit payments for widows or lone parents will also remain. The current payment arrangements for lone parents and people with a disability who participate in community employment schemes are also being retained without change. The family income supplement scheme, which benefits lower income families with children, is also unchanged.

Bearing in mind the recent bad weather, I am also providing for a special once-off additional two weeks payment worth €40 of fuel allowance. This will be paid to most recipients in the next two weeks, with the remainder of recipients getting this payment in early January. This payment will cost approximately €14 million.

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