Thomas Pringle (Donegal, Independent) | Oireachtas source

Despite the marginal increases in social welfare payments across the board, nobody feels any more secure about their situation. As far as the recipients are concerned, austerity has not gone away. We can safely say the budget was still an austerity budget because the cuts to social welfare payments made in previous budgets have not even started to be reversed despite the introduction of the €5 increase in payments. As a result income inequality persists, with little done in budget 2017 to tackle this growing problem. Fianna Fáil, Fine Gael and the Independent Alliance were too preoccupied with election rallying to go beyond the token increases to appease future voters in a future election. These directionless increases were introduced without any attempt to address the structural inequalities that contribute to rising income inequality in this country.

When we increase the State pension we should talk about the need for a universal pension, given the ageing population. When we increase jobseekers' and disability payments by €5 per week we should take account of the poverty threshold and the fact that these social groups are most at risk of poverty. We should also examine the situation of seasonal workers and how they are impacted. These are people who, through no fault of theirs, cannot avail of full-time employment and must rely on social transfers to keep them living in their communities throughout the year. This is something I have raised in the House over the last number of years. The cuts that were made have had a direct impact on seasonal workers. The availability of jobseeker's benefit was reduced from 12 and nine months down to nine and six months. That has had a huge impact. Deputy Pat The Cope Gallagher mentioned the impact in the fishing industry. It has had a huge impact on workers in that industry. It would cost approximately €39 million to reverse that cut nationally. Serious consideration should be given to doing that because it would make a huge difference for the workers who depend on the fishing industry for employment. In addition, in a perverse way it would ensure that workers are available for work in that industry because the workers would be able to sustain themselves during periods when there is no work.

With regard to the limit on subsidiary employment of €12.70 per day, that could be increased substantially without any significant cost to the Department. In fact, the Department could not tell me how much it would cost to increase it. We should consider increasing it to approximately €25 per day. That would make a significant difference to seasonal workers who have, perhaps, farm income from their subsidiary employment. The €12.70 per day amounts to approximately €4,600 per year in income from farming. If farmers are above that it excludes them entirely from jobseeker's benefit. Jobseeker's benefit is an important payment because it is taxable, not means tested and is significant for the recipients in terms of their families and their lives. Serious consideration should be given to that. I would like to table amendments on those matters on Committee Stage but they would be ruled out of order. We are not allowed to table amendments that would give rise to a potential cost on the Exchequer. Deputy Pat The Cope Gallagher mentioned earlier that he would deal with this on Committee Stage. Perhaps as part of the Government Fianna Fáil will be able to table amendments that could put a potential cost on the Exchequer, but I will be unable to do so.

In increasing the State pension we should also discuss a universal pension for everybody. Social Justice Ireland states that the biggest inequalities in Ireland are not those between the generations but those between people on higher and lower incomes. This could not be more true than in the case of the State pensions. Few people acknowledge the fact that income inequality also exists among people over 66 years of age. According to Social Justice Ireland, 20% of elderly citizens on lower incomes have seen a reduction of 11.5% in their average weekly equivalised income between 2009 and 2011. Another matter that should have been addressed in the budget is the cut in the telephone allowance for people on pensions. That hurt elderly people very badly not only in terms of the cost of it, which was significant, but also because many elderly people depend on alarm systems in their houses. The benefit of having the telephone allowance made them more secure in knowing they could have the panic and fall alarms available for use, as a land line is required to ensure the alarms will work.

Income inequality between State and private pension provision is due to the disproportionately generous tax relief the State provides to the private pension sector. Instead of increasing State pension by €5 we could have reduced the €2.2 billion taxes foregone on private pensions in the State. Nearly 82% of the tax relief for private pensions accrue to the top 20% of earners, with 56% accruing to the top 10% of earners. Pension tax reliefs mainly benefit older, male, well paid workers. If one adds how much we subsidise private health insurance, that number increases to €3.5 billion a year based on 2014 figures. This money could have been used to introduce a phasing-in of a universal pension, with expenditure coming from reduced tax relief. For example, if we reduce the marginal rate of tax relief on private pension contributions to the standard rate of 20% this could raise approximately €560 million for the State. This could be used immediately to raise the payments to those on the non-contributory State pension, two thirds of whom are women, by a minimum of €10 a week. That would make a significant difference to them. We subsidise every other sector in this country, yet we do not appear to be able to subsidise our people.

With regard to jobseekers and disability payments, we must consider risk of poverty for those groups. One in six people in Ireland are at risk of poverty. That is just over 750,000 people living on an income below the poverty line, of whom 230,000 are children. We are all too aware of the fact that child poverty has doubled since the Fine Gael and Labour Party Government took office in 2011. The CSO has identified the groups at highest risk of poverty as the unemployed, those on home duties, people with disabilities and children. Budget 2017 did nothing to mitigate the threat of poverty. According to TASC, the Think-tank for Action on Social Change, the basic rate of social welfare is €22 a week below the at risk of poverty line, so a €5 per week increase means people will still be €17 below the at risk of poverty line. When one takes account of inflation since the cuts were introduced in the headline social welfare payments, the €5 per week only equates to €1.72 per week in real terms. If we do not drastically reverse the accumulated cuts from past austerity budgets, poverty rates will continue to increase despite marginal increases to basic income supports.

We also need to make structural changes to the tax system as that is the only solution to address income inequality. Budget 2017 continued the transfer of wealth to higher earners and private sector interests by retaining the current corporation tax rate; failing to introduce a Robin Hood tax which could bring in more than €200 million a year, something this Government says it cannot do; enabling private developers to benefit from the first-time buyer scheme; and providing for upward changes to thresholds for inheritance tax. Furthermore, the proposed universal social charge, USC, cuts will bring far greater benefit to people earning higher incomes than to lower-income employees. Also, landlords will benefit from the increased tax free rental allowance under the rent a room scheme. The Government has not done anything to address the income inequalities in the State.

Some of the budgetary measures are welcome, especially the increase in the green, low-carbon, argi-environment scheme, GLAS, income disregards and the increase in farm assist and restoration of it back to the 2012 level. It is a pity the Minister did not go back to the jobseeker's benefit, jobseeker's allowance and look at the subsidiary payment. The fisherman's tax credit is welcome and it should be of help.

The Bill provides for a technical amendment relating to the secondment of gardaí to the Department of Social Protection. I saw a photograph in a Galway newspaper of gardaí and social welfare inspectors manning checkpoints in Galway chasing up suspected social welfare fraud. Is it a good use of Garda resources to have 20 gardaí seconded permanently to the Department? The Department's 2015 annual report indicates that 1.4 million people were in receipt of weekly payments. The Department carried out 1.1 million control reviews. That covers most of the people in receipt of payments. It saved, through that exercise, €69 million, which represents a saving on the total budget of 0.3%. We do not know from those control reviews how much of that is due to mistakes within the Department where recipients were overpaid and the amount involved was subsequently recovered and how much of it was due to potential fraud. That report indicates that 208 cases were referred to the Director of Public Prosecutions for prosecution. That number of cases detected out of 1.4 people in receipt of payments works out at such a small fraction that one would nearly not bother calculating it. The number of cases is minuscule. Much more is made of social welfare fraud than the incidence of it that is taking place. It is interesting that the amount attributed to it is always lumped in with administrative overpayments, which I believe is to boost the figures. Therefore, I would question if having 20 gardaí tied up with the Department is a good use of those resources.

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