Joan Burton (Dublin West, Labour)

I will acknowledge that the current Fianna Fáil spokesperson on social protection supported my measure to re-introduce and re-instate the minimum wage.

As we all know, overall Government spending in 2011 will be roughly €18 billion more than this year's overall Government income. The Government will get €42 billion from tax and PRSI this year. My Department alone is expected to spend over €20 billion of this. One of the core commitments in the programme for Government is the restoration of financial stability. For that reason, the transition to a more balanced budgetary position simply cannot be made without affecting social welfare spending.

The EU-IMF agreement, signed by Fianna Fáil, commits the Government to a further adjustment of at least €3.6 billion in budget 2012, including a reduction in expenditure of €2.1 billion. The Department of Social Protection has a major contribution to make in achieving a more balanced budget, as it accounts for 39% of expenditure or about 13% of GDP. Most Deputies know that this 13% of GDP is of vital importance to many local economies and regions. The EU-IMF agreement also commits the Department to reforms that can better support people on lower incomes while also ensuring that for welfare recipients, work pays. Despite these severe constraints, the Government is determined to do its utmost to protect the most vulnerable people in Irish society. I recognise that the people who turn to my Department for protection generally had no role in causing this economic crisis and should therefore be shielded from the worst of its consequences.

There are considerable challenges ahead, including the need to safeguard, as far as possible, the key income supports and services operated by my Department. I recognise the severe impact on families, individuals and communities as a result of this economic collapse and we are determined to protect them from the worst consequences of this very deep recession.

I wish to speak about reform and transformation of social protection. The transformation and reforming of our system of social protection is key to preserving our way of life in this country. While our social protection system is successful in providing a basic level of income support and a threshold of decency, it does not sufficiently enable people to get themselves back on track, into work, or, in the absence of jobs, to go back to education or training, and ultimately to achieve their full potential and financial independence for themselves and their families. Internationally, a number of features of our system are outliers. I refer to the emphasis on universal child cash benefits where other countries place emphasis on child care and preschool education. In our system it is possible for a small number of people to remain indefinitely on jobseeker's allowance. The system has also had very limited success to date in what is known as activation, assisting people in getting back to work, education or training as soon as possible, by providing advice, placement and training referral services. Given the significant increases in rates over the past decade, the so-called replacement rate, or the proportion of their former wages that unemployed people receive in benefits, has increased in the case of some recipients to levels where it may discourage them from seeking work.

The troika is asking very hard questions about the extent to which we can preserve such benefits that are considerably in excess of what is provided to citizens of the countries that are funding our State. Strong systems of social protection are at the heart of some of the world's most successful and dynamic economies. Countries such as Denmark, Sweden, Finland and the Netherlands, some of which are comparable in size to ours, have over time developed systems that enable citizens to cope with the economic risks of modern life. They provide sufficient income to deal with unexpected circumstances like unemployment, illness or disability or support for particular stages of life like childhood, the birth of a child and, in particular, when people become older and retire.

These countries view social security as a social contract between the state and the citizen. Like all contracts it imposes duties and obligations on both parties. When we compare our system of social protection to the social contract that exists in the Nordic countries we see they require the recipients of state assistance to do something in return, whereas we rarely do. I welcome Deputy Browne's reference to his desire to see more places available to people. I believe many people wish to be active and assist their community. They wish to be contributors, in the broadest sense, even if at this time of recession they find it extremely difficult to get a job.

The key element of our transformation from a passive system of income support to a more proactive model is the establishment of the new National Employment and Entitlements Service, NEES. This is effectively a public employment services policy. The service will merge FÁS employment services and community employment programmes, along with community welfare, into the Department of Social Protection. The idea is to create an integrated service providing a one-stop shop for people seeking to establish their benefit entitlements. The service will engage with people on the live register in a different way so that we can help to get more people back to work.

I reiterate my concern that our social protection system does not ensure the outcomes that children who are in poor families deserve to have. Many poor children in poor families in this country grow up to be poor adults. I would like to see emphasis put on more and better preschools and on early education rather than simply on cash transfers to families. That has been done very successfully in many countries and as a society we need to think about it.

Many contributors spoke about the issue of fraud. Most people on social welfare get what they are entitled to, no more and no less. Most people involved in social welfare are honest. They regard it as a mark of honour to treat with the State honestly. However, there are people who abuse the system. The difficulty with fraud and abuse in the system is not simply the money this costs but the undermining of the integrity of the system. Those people who pay into the system see people benefiting, perhaps within or near their own community. They work in the black economy or are scamming and ripping off the system in other ways. They are small in number but are very significant in terms of undermining the system. We have adopted a new approach based on targeted approaches by social welfare squads, integrated squads working with the Revenue Commissioners, Customs and the Garda to tackle social welfare fraud. There are also "feet on the street", inspectors who visit employers to ensure all their employees are registered for PRSI. They visit people in their homes to check they are genuinely what they claim to be and are receiving the benefits to which they are entitled, no more and no less.

There is another important point. At present we are taking in approximately €7 billion in terms of social insurance contributions but are spending in approximately €9 billion. The gap is €1.9 billion. Most Deputies, regardless of our political difficulties, want to see us having a strong, high-quality system of social protection. However, the deficit between what we take in in social insurance contributions and what we spend is €1.9 billion and we must address it. During the bubble in the construction sector it was filled by the enormous tax revenues the Government generated but the deficit is now €1.9 billion.

That is one of the issues we in this House must look at with regard to how we build a sustainable social welfare system that protects, in particular, our older and retired people who through their work and effort helped to build up this country. In my focus in approaching the budget, I want as far as possible to ensure the protection of the primary social welfare rates but also to see that social welfare expenditure is targeted at the people who need it most. In regard to older people, for example, we spend a great deal of money on fuel allowances. We might be far better off spending more of that money insulating older people's homes. Instead of having heat going out through single-pane windows and going up the chimney in badly insulated and poorly repaired homes we would save on fuel allowances.

These changes of emphasis are very important in terms of getting the kind of society we believe is appropriate. If one is dependent on a social welfare income the State offers support but equally, if one is of working age, the State expects one to work during one's working life and be a contributor.

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