Joan Burton (Dublin West, Labour) | Oireachtas source

There are significant signs that Ireland is emerging from the very damaging fiscal crisis that we inherited when we came into office in 2011. Thankfully, we are about to exit the bailout programme and will soon regain entry to the club of nations that can control their own fiscal destinies. The financial markets are confident in their belief that we can manage our own fiscal affairs. We can now in a real way consider how we as a country can restore confidence to our people and create the work opportunities that so many crave.

When the Government came to office we inherited the fall-out from the multiple policy failures that had built up during Fianna Fáil's disastrous decade and a half of misgovernment. Much has been written about how Fianna Fáil's reign of incompetence destroyed our banking system and public finances. However, Fianna Fáil had an equal-opportunities approach to ineptitude, making sure that its policy disasters rippled out across all areas of government. In my area of social protection and labour market policy, Fianna Fáil's utter failure to introduce any meaningful reforms to the social welfare system to encourage work have been highlighted repeatedly by the ESRI, the IMF and the OECD, the latter pointing out that we would have entered the recession with 100,000 more people in work if the party opposite had lifted its finger to introduce the job activation reforms that are taken for granted in modern European welfare states.

For me, Fianna Fáil's epitaph is not simply Anglo Irish Bank or the bank guarantee, but the less well-known but still extraordinary fact that between 2004 and 2007 - at the height of the boom - the share of households defined as jobless recorded a double digit increase, reaching 15% of the total, by far the highest in the EU. It is clear that the welfare system played some role in these changes. I refuse to listen to any lectures from Fianna Fáil about its progressive approach to social welfare and income distribution. For Fianna Fáil, progressiveness meant taking a slice from its property tax pyramid scheme and using it to increase welfare rates without making any effort to improve the prospects of people on social welfare in the jobs market through development of skills and training opportunities. If that is what Fianna Fáil means when it says it is progressive, then I do not agree. There is nothing progressive about just writing someone a cheque. From its comments on the budget, it is clear that Sinn Féin has inherited that handout mentality.

I have greater ambition for people who are unfortunate enough to be unemployed, to lose their jobs or to see the firms in which they work close. I view every individual on the live register as an untapped resource and a future employee, self-employed person or business person who will participate in the rebuilding of this country and its economic recovery. That ambition is why we are moving from a passive to an active welfare system. That is why I have focused on transforming the Department from the passive benefits provider of old to an active, engaged and focused organisation that provides employment services for jobseekers and also, importantly, for employers. Employers have an enormous role to play in getting people back to work, particularly young people. In addition to providing income support, we now help jobseekers find the work, training and education they need. I have secured additional capital funding next year which will allow my Department to complete the roll-out of its Intreo service in all of the Department's offices nationwide.

With the economy stabilising and business sentiment improving - factors which will no doubt be helped by this budget - and with the private sector now creating 3,000 new jobs every month, many more jobs will be created in our economy next year.

When we took office during 2011, the economic outlook was so bad that the live register looked certain at that stage to exceed 500,000 people. I am glad to report that the live register last Friday was at 400,807 and should go below 400,000 next week. This will see the live register at its lowest level since May 2009. It is still far too high, of course, but we are making firm, visible and tangible progress and will continue to make more progress due to our sound management of the economy over the next number of years. Bear in mind that the live register includes anybody who gets a jobseeker's payment and that at any single time there are between 75,000 and 85,000 people who work part-time. It is a very significant statement about people in the Irish economy getting back to work. The Central Statistics Office, CSO, figures for the end of June show that there were 33,800 extra people in employment in the first half of the year.

Getting people back to work is the most effective way of reducing social welfare spending, and we are doing that. That is the reason my Department has an ever-increasing focus on more engagement with employers. We have established a dedicated employer engagement section which will liaise with employers to help with their recruitment needs. We are developing, and will enhance further, bespoke recruitment and training arrangements for employers in each of the social welfare regions.

We will continue to arrange jobs fairs around Ireland and arrange for on-the-spot interviewing for employers who are recruiting. It is also worth noting that the Estimate for the family income supplement scheme will increase by more than €52 million over the Estimate provided for that scheme in 2013. This is testament to the increasing number of people availing of this scheme and gaining a firm foothold in employment as a result.

This is additional money paid on a week-to-week basis to families with children in relatively low-paid employment. It is a very important assistance for people getting back to work and for employers. During Ireland's Presidency of the EU Council, I brokered agreement on the EU-wide youth guarantee which, once implemented from next year, will offer all job seekers under 25 good quality employment, training or educational opportunities. As part of this, the Department of Social Protection is currently developing the range of opportunities on offer to young people in the form of internships, participation in employment schemes, subsidised private sector recruitment, and supports for self-employment. The full range of youth employment initiatives will be set out in the Government's plan for the implementation of the guarantee, which is to be submitted to the EU by the end of the year. Measures will include incentivising employers to offer more job opportunities to young people by reducing eligibility for the JobsPlus scheme for those under 25. In the case of JobsPlus, the employer who takes on a person who is more than six months and less than two years unemployed will receive €300 a month as a cash subsidy, paid on a monthly basis. In the case of a young jobseeker more than two years unemployed, the employer receives €400 as a cash subsidy paid on a monthly basis for the first two years of the young person's employment. That will make a significant opportunity available to people under 25 and a significant opportunity for employers. It is necessary that employers partner with the State and the education system to offer work opportunities to young people. We are providing for an additional intake of 1,500 young people to the JobBridge national internship scheme and we are ensuring that 1,000 places on the Department's Tús community work placement scheme are targeted at young people. In a further measure to support young adults, a minimum of 2,000 training places will be ring-fenced by the Department of Education and Skills for those under 25 years. These places will be provided under a follow-up to the successful Momentum programme that operated in 2013. In addition, my Department will provide income supports to an estimated 2,000 people availing of Momentum courses provided by the Department of Education and Skills at an estimated cost of €15 million per year. Furthermore, the Department of Jobs, Enterprise and Innovation will invest approximately €2.5 million next year in making funds available to young entrepreneurs via Microfinance Ireland and other business start-up schemes.

In parallel, we are introducing changes to income support for young people. With effect from January 2014, people without children aged 18 to 24 years in receipt of jobseeker's allowance will receive €100 per week unless they are an existing claimant on a higher rate, in which case the rate will not change. This is for new people coming into the system. People without children aged 25 years in receipt of jobseeker's allowance will receive €144 a week unless they are an existing claimant on a higher rate, in which case the rate will not change. This weekly €144 rate will increase to €188 when they reach 26 years of age.

However, people under 26 who participate in a back to education course will have their jobseeker's allowance increased to €160 per week. These changes are about emphasising the importance of services over simply income support. Young people face a difficult jobs market and need assistance in the shape of work, training and education services. That is why we are fully reinvesting the savings from these measures and millions more in an initial €46 million investment in youth employment initiatives. We are investing far more in young people willing to take the opportunity to get involved in further education, training, work experience and employment, particularly through JobsPlus, than we are saving in the measures to which I referred. I want to ensure that, in addition to the enhanced career and job prospects from improving skills and education levels, young people are financially better off in education, employment or training than claiming. Signing on for jobseeker's allowance on a person's 18th birthday is not the start to adult life that parents want for their children. We have to be more ambitious for our young people. No village, town, suburb or community in Ireland wants to see a significant number of young people walking down to the social welfare office to sign on at 18 years and still being in the same situation at 25 or 26 years of age. Our young people are too talented for that to be an acceptable future.

There is no doubt the social protection system has played a key role in protecting the most vulnerable and minimising poverty throughout the economic crisis. The fact that this Government has abided by its commitment to protect core weekly social welfare rates has achieved that outcome. Next year, my Department will provide an additional €100 million in funding for the payment of State pensions. This is the context in which some of the changes to secondary pensioner benefits must be seen. All the pensioners I have met in the past year have told me that the protection of their weekly pensions was paramount and I am satisfied to have done that.

I have said many times and I will state it again that the contribution social welfare spending makes to the overall economy is a significant lever in stabilising demand in our economy. This was particularly true in the recent economic downturn. This is why a strong and responsive welfare provision will continue to be an important part of stimulating our economy, even as employment thankfully grows. It is critical that we continue to provide for increasing financial allocations for our pensioners as they grow in number and for those unable to work due to illness or invalidity. We will spend more than €500 million on household benefits packages on people who are retired, carers and those with a disabilities who care for the qualified for the package despite international financial pressure to reduce expenditure.

When negotiations on the budget began, the Department of Social Protection was initially requested to make new expenditure reductions of €440 million. Today, however, I have been able to lower that amount to €226 million. An additional €30 million in savings will be made through additional fraud and control measures in 2014, while €34 million will be saved through increased efficiencies and lower than expected demand on some schemes as people go back to work, bringing the Department's cumulative adjustment to €290 million. I am keenly aware that reductions of €226 million will still have an impact on, and cause difficulties for, social welfare recipients. However, the lower adjustment means I have protected the State pension, the carer's allowance, the half-rate carer's allowance, the disability allowance and all other core weekly payments upon which people depend. I have also protected crucial supplementary supports for pensioners, carers and people with disabilities, such as the fuel allowance, the electricity and gas allowance, free travel, the half-rate carer's allowance and the respite care grant.

Child benefit has also been protected in this budget and will remain a vital universal support for all families and children. Reducing the adjustment from €440 million to €226 million has allowed me to again preserve the core weekly payment rates for all 1.4 million current beneficiaries while at the same time providing for the increasing number of pensioners, who represent a real demographic bonus to Ireland.

Providing a safety net for those in need and a pathway back to work for jobseekers are two of the three core functions of the Department. The third is rooting out welfare fraud. In that respect, my Department will raise a further €30 million next year through additional fraud and control measures. For instance, we have extensive co-operation now with the Garda. We will take a number of gardaí into the employment of the Department for a period and deploy their skills and resources at the airport and Border regions on fraud control and fraud deterrence. It is important that taxpayers and those who pay PRSI be aware that as far as possible we do all in our power to limit any abuse of the social welfare system. I make no apologies for a zero-tolerance approach to welfare fraud. We must ensure that every cent of the welfare budget goes to those who need it most.

I have always been of the conviction, since I first entered politics, that the strongest protection against poverty is decent, secure and fairly paid work, and the changes that have been made in the social welfare budget are in keeping with that conviction. This budget will help the unemployed get back to work, reduce the overall welfare spend as part of a sustained effort to repair the public finances, and ensure the safety net of social welfare bears comparison with that of countries throughout Europe with good social welfare systems. Of course, our social welfare payments are infinitely higher than those paid across the Irish Sea and north of the Border. We want social welfare as a safety net, but also as a trampoline that catches people, lifts them up again and gets them to where they want to be - that is, particularly in the case of young people, back to work, training or education.

This will only work through partnership between the Government and local authorities, the public education and training services and, above all, employers in both the public and private sectors, to create opportunities for young people. Austria, a small country similar to ours, has a youth unemployment rate of less than 7%, which was achieved by blending education and work experience so that nobody comes out of secondary school without having had some experience of work. Equally, nobody does three or four years of training, whether at a higher degree level or at an apprenticeship or trainee level, without being able to go out into the wider world of work with serious work experience on their CVs. One of the problems for the young people, many of whom are brilliantly qualified, who came out of education during the height of the crisis has been that there were no jobs available for them and they ended up with CVs with large blank spaces of months or years. As a consequence, the jobs tend to go to the new ones coming out or to those in existing jobs. We must break that trend so that, for those who are unfortunate enough not to be able to get a job in the way that was the experience during the Celtic tiger, we provide a pathway back to work and make work experience, in co-operation with employers, an integral feature of the Irish system.

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