Lucinda Creighton (Dublin South East, Independent) | Oireachtas source

It is unfortunate that this Social Welfare Bill is yet again a missed opportunity. I want to address two key issues in my contribution. First, the social welfare system is failing to achieve its purpose, which is, supposedly, to give people a hand up and to help them get out of poverty and unemployment. Second, the system discriminates between the employed and self-employed and this cannot be allowed continue.

Our social welfare system is failing. My constituency, which I share with the Minister of State, Deputy Humphreys, has both extremes in it. It has some extremely wealthy people, but it also has a huge cohort of extremely poor people. These people are struggling and are becoming representative of intergenerational poverty and deprivation. Nothing in our welfare system encourages mobility or creates opportunities for these our poorest people. Homes and families are mired in long-term unemployment. As per the CSO figures of March 2014, in excess of 180,000 people are in long-term unemployment. This is a cancer on our society. All the studies show that being unemployed causes long-term damage to a person's earning potential, health, mental health and to their children's educational and employment opportunities. Unemployment particularly lends itself to alcohol and drug dependency and ultimately causes homelessness.

The Minister has had ample opportunity over the past number of years to be creative and to find new solutions to the issues through the welfare system. Instead, we have seen a missed opportunity and a tinkering around the edges. People stand to lose too much by leaving the welfare system and there is too little mobility. People lose medical cards, rent allowance and various other benefits if they leave the system. The lack of any support for low earners and people leaving welfare to take up employment is unconscionable.

It is immoral and consigning certain families, with certain postal codes, to intergenerational unemployment and poverty. These are the people with little or no hope and no prospects and they are being consigned to a vicious cycle of poverty. If the Minister does not take my word for it, she should talk to Mr. John Lonergan, the former Governor of Mountjoy Prison, who has said he can predict the likelihood of a child, juvenile or young person ending up in detention, prison or a life of crime simply on the basis of where they come from and who their family are.

Unfortunately, no serious material change has occurred under the Government. There has been no real reform of the welfare system, with generations of people stuck in a downward spiral. The ESRI provided us with some very valuable information in its excellent report on joblessness in 2012, of which I know the Minister is aware. The report showed that jobless families were at enormous risk of poverty. Interestingly, it showed the need for a broad range of policies, including on child care, to tackle this issue. Deputy Robert Troy has just spoken about the need to provide child care support for working women and families. Why is child care such an important policy tool? Quite simply, it is because women are being forced out of the workplace. They have suffered most in the recession in that they have lost 14% of their disposable income, as opposed to 9% for men. In 2008 some 60.5% of women in Ireland were in employment; in 2014 the figure has dropped to 55.9%.

This should not come as a surprise to us. It has not happened by chance but because of the policy choices that have been made. Policies have driven down the level of participation by women in the workplace. The reduction in children's allowance has been a contributory factor, as has the reduction in maternity benefit introduced in last year's budget. No attempt has been made to tackle the spiralling cost of child care. Child care costs in Dublin now average almost €1,200 per month. In order to afford this, a woman or family has to earn almost €24,000 a year simply to pay for child care, for which there should be tax relief. I asked a question of the Minister for Finance just last week about how much he or his officials would estimate the cost of relief at 20% for working families, which would be modest enough. The cost was estimated at €680 million. While that is a substantial sum, if we are serious about labour activation, lifting families out of poverty and the potential of women to contribute to their homes, society and the workplace, we have to be serious about investing and giving opportunities to women to work.

The increase of €5 in children's allowance is not just tokenistic; frankly, I find it quite insulting. It will do very little to change the plight of families and very little, if anything, to change the plight of women in the home or the workplace. It is not in any sense a radical or dramatic solution to the major challenge we face in society, the major challenge to women who want to contribute, develop their careers and give their family and children a better chance in life. It really is an insult to them that no thought has been put into this issue and that no measures have been introduced to support and assist them in the workplace. This has to change.

The second point I want to address is the fact that the Bill, once again, misses the opportunity to end discrimination against self-employed persons. The self-employed are becoming quite used to being discriminated against, but that does not make it right. We know that the welfare system and the tax code both discriminate against them. We know that self-employed persons pay a higher rate of income tax than PAYE workers and the higher rate of universal social charge, 10%, which was introduced a number of years ago was increased again in the budget to 11%.

All of this contributes to two things, of which the first is a sense of total disillusionment among people who are trying to set up businesses, be creative and create employment. The second, a matter which is for the Minister for Finance to deal with, is that it sends a message that the Government does not trust the self-employed to pay their taxes, assumes that they are fiddling the tax system and, therefore, that they have to be charged a higher rate of income tax. That is the message being sent again and again and it is wrong on every level. We talk about an enterprise economy and claim that we want to support the indigenous economy and people in start-up companies and encourage them to grow and expand their businesses in order to employ and create opportunities for others, yet we punish them time and again through the tax code.

We are also punishing them through the welfare system. It is blatantly wrong that employees have automatic welfare entitlements if a company goes bust, whereas the company's owner, the person who took the chance to establish the company, who lies awake at night worrying about its future and that of his or her employees, gets nothing if it goes bust. Essentially, he or she is cast to the wolves. I am sure the Minister, Deputy Joan Burton, and the Minister of State, Deputy Kevin Humphreys, have encountered such persons in their constituencies, in the same way as I have. For example, there are people who worked in the construction sector, in particular, and started their own businesses, whether in plumbing or any other trade. When the crash occurred in 2008-09, they went out of business and found that they were entitled to nothing; they were not entitled to jobseeker's allowance or anything else. Even though they had paid their taxes and made their social contributions, they were had been with nothing. This is wrong and immoral. If Deputy Joan Burton is to leave one legacy as Minister for social Protection, it should be to provide social protection for those who take chances and risks, those who account for 70% of employment in the State, and put themselves and their families on the line in order to create enterprises and job opportunities. We must ensure they are acknowledged and protected and that they will no longer be treated as second-class citizens under the social welfare code. This is supposed to be an enterprise economy interested in incentivising business, yet we treat business owners who take all of the risks with utter contempt.

If people are employees and the business goes bust, they are entitled to immediate access to benefits; if they are self-employed, they have no immediate entitlement to benefits. If they are employees, they do not have to undergo a means test; if they are self-employed, there is a full means test. If they are employees, personal savings are not assessed; if they are self-employed, all savings are fully assessed. If they are employees, other income is not assessed; if they are self-employed, all income is fully assessed. If they are employees, cohabitee income is not assessed; if they are self-employed, cohabitee income is fully assessed. If they are employees, the value of all property is totally ignored; if they are self-employed, the value of property, other than the family home, is fully assessed. If they are employees, they are covered for invalidity; if they are self-employed, they are not. If they are employees, they are fully covered for a disability; if they are self-employed, they are not.

It is apparent that this discrimination in our social welfare system cannot continue and I appeal to the Minister to make this her focus for the remainder of the lifetime of this Government. I do not know how long that will be. I expect the Minister will have an opportunity to introduce a new social welfare Bill next year before the election if it takes place in 2016 so she has an opportunity to address this. She has an opportunity to level the playing pitch not out of any sympathy or a sense of obligation to the self-employed for the sake of it but out of a sense of equity, fairness and a belief that we treat and value all our citizens equally and that we particularly respect the work, effort and sacrifice of people who set up companies, who take out loans, who often re-mortgage their family homes and who put their siblings, spouses and children through stress and the ordeal that goes with establishing a business. She should give those people the sort of respect and the rights and entitlements to which they are due. On the basis that I do not expect her to do it this year, I appeal to her to look at that opportunity and plan and implement it next year before the next general election. If that is her legacy, it will be one for which we can all have huge admiration and respect because it would be the right thing to do.

See this speech in context