Thursday, 9 December 2010
Social Welfare Bill 2010: Committee and Remaining Stages
I oppose this Bill in its entirety because it is consequential to a Budget Statement made on Tuesday last, one of the most unfair budgets that has ever been seen by this State. In particular, it is unfair on those who are dependent on welfare payments in the State and I oppose it on that on that basis.
I also believe there was an alternative. This alternative should have been pursued by the Government rather than targeting the most vulnerable in our society, who, in many cases, are living in abject poverty. The consequences of what is contained in this Bill will have a detrimental effect and will increase the levels of poverty in our society. This is an absolute disgrace considering that the Government, which is implementing it, is one that was elected on a platform of protecting the most vulnerable.
As I stated in the few minutes I had on Second Stage, the fact that the title of the Department was changed not so long ago to Social Protection was welcome, except that we see there is no protection being given when the very little those dependent on social welfare are getting is now being cut further. It has been cut over the past number of budgets and the cumulative effect of those cuts has never been measured properly by the Department.
One of the key aspects of any legislation proposed here is that there should be an impact assessment of the effects not only in terms of throwing out figures such as the 4% or €8 decrease, but of a cut on those on social welfare. In the main, these people are already struggling to make ends meet considering the increase in the cost of education, housing, electricity, gas, transport, health, mortgage interest and communications, which I listed previously. These are the effects. What little was there already is being further squeezed. As I stated on Second Stage, these families are dependent on public services and their costs will also be increased given that the Government has further cut the grants to local government and public transport organisations. Many of the other social support networks which are available or should be available to those who are struggling have also been cut in the budget. Some were also cut in previous budgets and people are finding it difficult to manage.
The Bill contains quite a range of proposals and virtually every one of them is detrimental to those dependent on social welfare payments. Every section of the Bill should be opposed because the effect of the entirety of the Bill is to make those dependent on social welfare worse off, and much worse off in many cases. It is scandalous that the richer people in our society will be hit proportionately far less. People dependent on social welfare spend all of their money. They do not save their money, put it away, hide it in bank accounts or squirrel it away in offshore accounts because they do not have money to do so. They spend their money locally. The effect of all of these cuts will be further job losses rather than what the Minister stated, which is that by this time next year the social welfare bill will have been reduced. I believe the opposite is the case and that we will see, particularly among local retailers, job losses because there will be less money going around.
The effect of the cut in the Christmas bonus last year was to send many people onto the dole queues. With regard to dole queues, the Minister has proposed a new community work placement programme with 5,000 places. Any new initiative such as this should be welcomed but it is bizarre that there does not seem to be any facility for people who might want to participate in the programme. One does not apply to the scheme; one will be forced onto it.
Questions will arise but given the short time we have we will not reach them on Committee or Report Stages to elicit all of the information. The Government is rushing through this legislation. It is a pity it does not rush to the election, as I stated earlier. We should have dealt with this during an election campaign in which all of the platforms were put to the people prior to the Minister impacting on the poorest in our society. Who will reverse these cuts after an election? Who is willing to stand in opposition to each of these sections and reverse them on being elected to government? To date, Fine Gael has stated some of the same cuts will be implemented and I have not heard from the Labour Party other than its leader stating he will not reverse cuts. Perhaps things have changed now that they have seen the full scale of the cuts to be implemented.
That is why I asked for confirmation that the Labour Party if in government would reverse these cuts, and I welcome the fact that it would reverse each and every one of the cuts contained in this Bill. We are dealing with a Bill which is odious because it targets those who are dependent.
Social welfare supports employment in the real economy and the effects will be that people working in local shops will also suffer the consequences of the Bill. It is scandalous that no attempt is made to see the full impact of this. This is arrogance by the Government. I remember two or three years ago when a document, Regulating Better, was produced by the Government on how legislation was to be put forward. Regulatory impact assessments were to be made on every Bill. I have not seen it done on this Bill. Most of us here will be able to do it for the Minister in case he does not have his Departments in order. For every person dependent on social welfare the effect will be further poverty, going without food and heating, and struggling to ensure their children go to school properly dressed and that they can travel to school on the public transport network, particularly in rural Ireland where it has been made more expensive. Thankfully, many of the families on social welfare will still benefit from free travel. However, many others not fully dependent on social welfare will have to pay.
The Minister announced a €40 once-off fuel allowance payment because of the conditions. This is welcome, but it is equivalent to only five weeks of an overall cut in social welfare payments. What about the other 47 weeks? It is a miserly once-off grant. One must consider that many of those now dependent on social welfare do not qualify because they have not been unemployed for long enough. They have been made redundant, as have quite a number of people, over the past 15 months and they do not qualify for it and will receive neither the €40 nor the fuel allowance. Other people will be affected by the various cuts. I oppose the section.
Chuir mé an-spéis sa mhéid a bhí le rá ag an Teachta Aengus Ó Snodaigh, mar dá leanfadh muid polasaithe Páirtí Shinn Féin, séard a tharlódh sa tír ná nach mbeadh aon saibhreas á dhéanamh ag éinne. B'fhéidir go mbeadh chuile duine mar a chéile, ach b'fhéidir go mbéidis mar a chéile ar an gcaoi a bhfuileadar mar a chéile i gCúba - bocht. Go bunúsach, má tá sé i gceist againn go mbeidh €20.6 billiún á íoc ar chúrsaí leasa shóisialaigh, caithfidh an t-airgead sin a theacht as áit éigin agus caithfidh an t-airgead sin a shaothrú. Leis an polasaí atá ag Sinn Féin, ní bheadh an t-airgead sin ann.
As I stated in Irish, if we followed the policies of Sinn Féin, the simple reality is that the €20.6 billion required would not be available to spend on social protection. Sinn Féin would destroy the country in two ways: it would destroy the economic base of the country, which is the international sales we make to earn enough income for the country to function, and it would utterly destroy any capacity to borrow the money we need to pay for education, health and social welfare. An effect of its particular policy might be to make everybody equal, but everybody would be equal at the level of a country such as Cuba. I do not think that is what the Irish people deserve or want. Therefore, in putting together the budget it is our duty to ensure the productive parts of the economy can function, grow and continue to create more and more wealth. We need them to bridge the gap between the income of the State and the borrowing of the State, or the income of the State and the expenditure of the State. The reality of the matter is that a huge part of my Department's income comes from social insurance payments. The level of funds gathered from that source depends, in turn, on the existence of a vibrant employment base in this country. If we want to get to better days, we have to make sure employment grows and, as a result, the income of the social insurance fund grows. That, in turn, makes it easier to maintain better and bigger social welfare payments.
The people are being asked to make a fundamental decision. They need to decide whether to preserve the €20.6 billion in payments that will be made by the Department of Social Protection next year. Perhaps they would prefer to divide a €13 billion contribution to social protection, which is what has been proposed by Sinn Féin, between the various groups that deserve payments under the system. Nobody in Ireland, other than those who are totally deluded, would choose a €13 billion budget in preference to a €20.6 billion budget. There are no easy choices. In framing this budget, we are putting the country on the road to having sustainable finances. We are continuing to allocate substantial funds to the Department of Social Protection. If we want to increase rates in the future, we will have to continue to reduce unemployment.
Deputy Ó Snodaigh referred to the Tús scheme. He said the numbers were small. The reason that is the case is níl ann ach tús. I know from experience that it takes time to place people in these positions. I will ask integrated Leader partnership companies throughout the country to roll out these places as soon as possible. I hope to have people in place by March. I know from my previous experience with the roll-out of rural social scheme that those staff will be put to the pin of their collars in trying to provide 5,000 places by the end of the year. Deputy Ring might remember that when the rural social scheme was originally rolled out, month after month of gríosadh was needed to get these positions filled. It took the guts of two years to fill them completely. I expect the roll-out to be much quicker in this case. I hope it will be.
It is about time we faced the facts about the banks. When we guaranteed bank deposits, we guaranteed we would have a banking system. There is no comparison between the Irish banking system, which is largely deposit-led, and the banking system in Iceland. If we had allowed the banks to close, nobody would have been able to get money from an ATM, cheque books would not have functioned, it would not have been possible to access deposits and businesses would not have been able to get at their money. Our economy would have been devastated and our credibility worldwide would have been wrecked. It would have taken us many years to repair the damage. Although it was galling to have to bail out people and institutions that acted recklessly, we did so because we knew the effect on every ordinary citizen of this country of failing to act would be much worse. The after-effects of the recklessness to which I refer would have been much worse if we had not acted in such a manner.
As someone who has no particular connection with any bank or any bankers, I honestly and sincerely believe we had two options - to retain a banking system in this country or to have no banking system. It is a no-brainer to say the country cannot function on a day-to-day basis without a banking system. Our Cabinet colleagues from the Green Party are aware of the real choices we faced, as opposed to the choices we would have liked to have had. We could not act as if the madness that had happened in the banks and in society had never happened. When we faced a choice between saving the banks and not saving them, we had to decide that saving them was the lesser of two evils.
The Labour Party is opposed to section 3 of the Bill, which proposes to reduce a range of benefit payments, including jobseeker's benefit, illness benefit, health and safety benefit, injury benefit, disablement gratuity, carer's benefit, invalidity pension, widow's contributory pension, widower's contributory pension and guardian's payment, by €8 per week. All of those who will be affected by this measure suffered similar €8 cuts in their welfare payments last year. Throughout the past year, we have heard from many groups representing people in those categories about the impact last year's cuts have had. The difference the cuts made to their lives was that they made them much more difficult and created hardship. The rationale that was used at the time was that there had been a reduction in the cost of living. While I do not doubt such a reduction had taken place, the principal factors in last year's reduction in the cost of living were house prices, interest rates and rent. Those factors did not apply to many of the people in these categories. There may have been some kind of cost-of-living justification last year, but there is no such justification at all this year. We know there has been no appreciable reduction in the cost of living across a range of items. Yet, the Minister is saying to people who have already suffered a cut of €8 in their payments that they must accept a further €8 reduction. There are many people in receipt of the benefit payments to which I refer who are just about keeping their heads above water. These individuals will not be able to manage in light of the additional cut that is being introduced.
The proposed cuts are savage in nature. The Minister had a number of choices open to him in respect of this matter. Earlier, he gave a long, rambling speech regarding how he had no choice but to cut welfare payments. Notwithstanding the fact that it completely mismanaged the economy in recent years, the Government had choices available to it in the context of how it proposed to balance the books. The Labour Party set out a range of options which could have been pursued. For example, the Government could have introduced an additional tax in respect of people with incomes in excess of €100,000. That would have been one fair way of proceeding. In addition, the Government could have made much quicker and more considered progress in respect of the tax reliefs on pension contributions. It has taken an extremely easy approach in this regard. There is potential for much more significant savings to be made in this area.
In the context of ending the reliefs on property-based tax reliefs, the Government took its time and proceeded at a very slow pace. These reliefs could have been removed much more quickly, which would have allowed the Government to avoid the necessity for cuts in welfare this year. Unfortunately, it did not take the approach I have suggested and instead targeted the cuts at people on the lowest levels of income. I refer here to those who are on welfare payments and those in low paid jobs, that is, the working poor. It is regrettable that this step has been taken.
The Joint Committee on Social Protection heard all about the difficulties experienced by those who have been struggling with the cuts introduced last year from the numerous groups - the Society of St. Vincent de Paul, One Family, Social Justice Ireland, Focus Ireland and various others - which came before it in the past 12 months. I wish to make special reference to the Chairman of that committee, Deputy Healy Rae, whose behaviour in all of this has been reprehensible. A man who should be aware of the situation and who should know all about the levels of poverty that exist has entered into some form of grubby deal in order that he might maintain his political dynasty in Kerry South. Deputy Healy Rae has simply ignored the various concerns of the people to whom I refer and who have looked to him during the year for some kind of protection. These individuals have a right to expect that the Deputy, as Chairman of the joint committee, would stand up for their rights and oppose the cuts to their welfare payments.
The way Deputies Healy Rae and Lowry have behaved in recent times is disgraceful. I hope that all of those people in Kerry South and Tipperary North who are dependent on carer's allowance, injury benefit, jobseeker's benefit and invalidity pension are aware of what the Deputies who represent them are doing in their name. Deputies Lowry and Healy Rae appear to have no compunction with regard to completely selling out those of their constituents who are dependent on welfare payments. That is a disgrace. I hope that in the forthcoming general election the people in the Deputies' constituencies-----
-----will give them their answer.
The economy requires a stimulus package. The retail, hospitality and catering sectors are all haemorrhaging jobs. Rather than putting a stimulus package in place, the Minister has, in the form of this Bill, offered us an austerity package of €850 million in cuts. Not only will he cause extreme hardship for those who are dependent on social welfare payments, the cuts he is introducing will also cause further difficulties in the sectors to which I refer. Businesses in Corr na Móna, Whitehall, Ballymun and Castlebar will be directly affected by this austerity package, which will remove money from local economies. The money people receive via welfare payments is not saved, it is spent in local shops, in hairdressing salons and in the purchase of services. The removal of €850 million from local economies throughout Ireland will have massive knock-on effects. The Labour Party is utterly opposed to these cuts, particularly because they will cause real and substantial hardship for the many thousands of people who depend on social welfare payments.
Déanfaidh mé iarracht gan déileáil leis an rud ar fad. Sa chuid seo den Bhille, táimid ag déileáil le ciorruithe ar íocaíochtaí ar réimse mór fada. Do na daoine siúd ag a bhfuil post agus maoin, ní dhéanfaidh sé an méid sin difríochta go mbeidís thíos €8 sa tseachtain ach sa chás seo is figiúr substaintiúil é don chuid is mó de na daoine atá ag braith ar íocaíochta leasa shóisialta. Dá réir sin, tá mé ag cur ina choinne mar táimid ag déileáil leo siúd atá ag braith ar jobseekers benefit, illness benefit, health and safety benefit, injury benefit, disablement gratuity, carer's benefit, the State pension, invalidity pension agus roinnt eile cosúil le disablement pension agus a leithéid. Seo iad na daoine is boichte inár sochaí, seo iad na daoine a ba chóir don Stát cosaint a thabhairt dóibh sa chéad dul síos, ach tá an Stát ag casadh orthu nuair atá siad in ísle brí agus ag baint an tseans atá acu a mhaireachtáil le caighdeán ar bith. Tá an Stát anois ag baint an chaighdeáin sin uathu.
Tá breall ar an Aire agus ba bhreá liom go mbeadh díospóireacht againn faoin achoimre a chuir muid os comhair an Rialtais sular chuir sé an buiséad le chéile, ina léirigh muid carbh as a dtiocfadh an t-airgead, ca háit a bheadh todhchaí na tíre seo, agus todhchaí i bhfad níos fearr a bheadh ann faoi Shinn Féin ná mar a bheadh faoin Rialtas seo agus na cinntí atá glactha aige go dtí seo. In ainneoin an meid a dúirt an tAire, that Sinn Féin might destroy the capacity to obtain loans to run the country, in light of its actions in recent years Fianna Fáil has already done a lot more than anyone else could possibly do to destroy this country's capacity to do anything.
Mar rogha nó mar alternatives, tá airgead sa tír agus is ait tar éis an bhuiséid seo go mbeidh breis airgid ag na milliúnaithe atá féinfhostaithe sa tír seo. Beidh siad ag baint tairbhe de €22,000 in aghaidh na bliana as an bhuiséad seo. Sin scannalach, na daoine is saibhre sa tír, ní amháin nach bhfuil siad buailte i gceart ó thaobh an bhuiséid de, beidh siad ag déanamh brabúis as. Sin an sórt scannail atá ag teacht chun cinn ar an lá céanna go bhfuil €40 milliún á thabhairt do lucht AIB de thairbhe go ndearna siad praiseach den bhanc sin. Sin an scéal atá ag dul amach, an rud a chloiseann na daoine atá ag braith ar leasa shóisialta.
Níl mise ag tacú leis an alt seo den Bhille. Mar a dúirt mé, tá rogha ann. Mar shampla, tá leath-thrilliún d'airgead i bpinsin phríobháideacha sa tír seo. Dá mbeadh levy de 1% ar an méid sin, bheadh €5 billiún faighte. Níor fhéach an Rialtas air sin, níor fhéach éinne air go dtí seo, fiú mo pháirtí féin, ach sin cruthú go bhfuil maoin ann.
This is proof that there is wealth in our country. A 1% levy on the €500 billion that is invested in private pensions here would raise €5 billion. No party - including that which I represent - has considered this matter. It must be examined because when one is in dire straits, one should seek alternatives. The cuts relating to jobseeker's benefit and the various other benefits are being introduced as a matter of political choice. There are alternatives and there is a way out of the hole in which we currently find ourselves. However, the way to which I refer is not that proposed by the Government in the form of this Bill.
This probably is the most savage cut of all. I repeat, at this late stage, that this measure probably will save approximately €96 million. This morning, Members learned from newspaper reports that AIB intends to pay out €40 million in bonuses.
In any event, I have found €40 million for the Minister already. He should simply take it from the banks if they have €40 million to give away. That would constitute a start and would deal with the blind pensioners.
A story broke today concerning a social worker in County Kilkenny, who has seen children taking food from a bin. How could Members, particularly on the Government side, allow this to happen? I am referring to the four Independent Members, to whom I again wish to make a plea. The most savage cut of all is to the carer's allowance. Carers work for their payment and do not receive it for nothing. They save the State a fortune of €2.5 billion each year and work very hard. What will happen if carers are not available? The State will be obliged to find nursing homes for those who are being cared for. These people will be admitted to hospitals, where they will take up badly-needed beds. Moreover, there will be a knock-on effect in respect of medicine, drugs and so on when trying to keep those concerned from becoming sick.
I cannot understand how the Government or its backbenchers could allow this to happen. I acknowledge it was necessary to make choices but it should not have been necessary to make this choice. A measure affecting the blind, carers and the disabled is wrong. The Minister is a decent man who knows this is wrong, as do the backbenchers. I wish to make a plea today to the Kerry rose, Deputy Healy-Rae and to the Tipperary stars, Deputies Lowry and Mattie McGrath. The latter is a great speaker on RTE radio who tells the country that he will bring down the Government and will not allow this to happen. He then marches into the Chamber every time to vote for the Government. In addition, Deputy Behan has told people there is no alternative. There is an alternative to cutting benefits to the blind, the disabled and to carers. There is a fairer and better way. I appeal to the Kerry rose, the Tipperary stars and the Independent Member to be what the people elected them as, namely, Independents. They should take an independent view on this proposed measure, which was wrong yesterday, is wrong today and will be wrong tomorrow.
I remember when the Government announced increases in child benefit and all social welfare payments in 2007 to applause from the choir opposite. It took full credit for all those payments. I also remember visiting the doorsteps that May. Although payment arrangements usually are put in place by the middle of a year, that year they were brought forward in order that the first increases in child benefit and social welfare would take effect by May 2007. What was so special about that month? It was the time of the general election when the Government thought it was doing a great job for the people.
I again tell Independent Members and Fianna Fáil backbenchers that this offers them another opportunity. Opposition Members will give them an opportunity in a few minutes when they are asked to vote. They will even be given a second opportunity by being asked to walk through the lobbies. I appeal to them to vote with their conscience and vote that it is wrong to take money from carers, the blind and disabled. I urge Fianna Fáil backbenchers and the Independent Members to do the right thing and to vote with the Opposition. It will not change the overall Bill but it will restore the money to those who badly need it.
I listened to the Minister for Finance, Deputy Brian Lenihan, who talked about reverting to the payments levels that obtained in 2007. However, bread, milk and insurance were cheaper in 2007, as was the overall cost of living in Ireland. It is not cheaper now, as items are more expensive and people are experiencing greater pressure. Even this winter, people have been obliged to pay more money for coal and fuel to keep themselves warm in their houses. This measure is wrong now and will be wrong tomorrow and the week after. I appeal to Government Members not to be Christmas Scrooges and to make the right decision in this regard by changing this immediately.
Members have listened to the Minister's convoluted explanations of the reasons he has been obliged to introduce these measures, his justifications for so doing and so on. Behind it all lies a political choice. Fianna Fáil in Government decided last year to implement across-the-board cuts of €8 on the most vulnerable and least well-off and have done so again this year. This was a political decision and there is no other way to look at it. While the Minister can justify and explain all he wishes, this can be summed up by stating the Minister decided to do this and the Green Party decided to go along with him. The most vulnerable sectors, namely, jobseekers, the disabled, the blind, widows and everyone on the breadline are those who have been hit in this section of the Bill dealing with benefits and in the next section dealing with allowances.
Moreover, this has not achieved anything for the Minister in the long run because in his concluding response to the Second Stage debate, he acknowledged that despite everything he has done, the social protection budget will still comprise 39% of total State expenditure, compared with 38% last year. In other words, the Minister is 1% less well-off.
The Government took the wrong choices because the savings it is making from all these measures is very small when compared with what it could get, were it to make the right choices. Why did the Government not introduce the abolition of the property tax reliefs before 2014? Why not abolish them all now? Why not deal further with the pensions? Why fail to touch the tax exiles, as was promised in the last budget? I refer to 7,000 people, virtually all of whom are millionaires, who still jet in and out of the country. They have not been touched and are not paying a penny in tax this year, any more than they did last year. Choices are available and although the Minister may justify the reason he was obliged to hit the less well-off all the time, it is mere political justification with no basis to it whatsoever.
Why could the Government not have adopted the Labour Party's suggestion to introduce a new tax rate of 48%? Why did the Government not change the tax rates, which would have been a much fairer choice to make? These all are political choices that relate to which sector and segment of the community will be hit hardest. Instead, the Government still protects the high earners and its friends in the property business. It still protects the influential and the most well-off in this society. With these measures it is hitting the least well off and the most vulnerable, whether it is carers, the blind, widows or lone parents. Members should consider the poor lone parent who is trying to escape from the poverty trap. Assuming that such a person is also in receipt of a half-carer's allowance, he or she will be hit twice. In addition, such a parent also will be hit, after earning less than €80 per week, by the new universal social charge. The Minister will pauperise and impoverish those who already are on the edge. These are the choices and the Minister should admit that this is what this Social Welfare Bill is all about.
Before the Acting Chairman, Deputy Charlie O'Connor, took the Chair, I raised a point of order about whether a Second Stage debate was warranted because a perusal of the proposals regarding the various sections, including section 3, which is under discussion at present shows that by and large, sections are being opposed but very few amendments of substance have been tabled. Deputy Ring was reported in the media last night as stating that he intended to table amendments to reverse the cuts proposed in this Bill. I cannot discern any such amendments.
In my earlier speech on Second Stage, I mentioned to the Minister, Deputy Ó Cuív, that I disagreed with the impact on the vulnerable in the Social Welfare Bill and asked him to table his own amendments and to ascertain whether the money could be found from elsewhere in the Department. I will not go back into that long debate, but I believe there could be a little bit of tweaking. I had stated that if Deputy Ring-----
----- sought to cut €2 from the contributory old age pension, I would vote for it because, on balance, that might make it a little easier for some of the more vulnerable, as those who are also vulnerable, albeit slightly less so, might be able to take a small hit. However, no such amendments have been tabled; there is only opposition to the proposals.
Let us now look at the opposition to section 3 and other sections. Sinn Féin says its budget would make savings of €4.5 billion, but I disagree with its analysis and its target figures. Notwithstanding that, I believe Sinn Féin is being true to itself in its opposition. It is a similar case with the Labour Party, which has stated that it would increase income tax and reduce tax on welfare. As part of the Government, the Green Party shares collective responsibility, but if it was in Government alone, the Green Party would have increased the tax element. However, as part of a collective Government, we must operate within its confines. We would not go as far as the Labour Party proposals. However, there is validity in the reason behind the Labour Party's opposition to this section, although it would not want to oppose it in full because while it does not agree with cutting welfare, it would make the cuts somewhere else. Therefore, we can see the logic of its opposition.
The opposition of Fine Gael to this section, however, makes no sense. It did not table any amendments, but seems to be surfing the wave of popular indignation rather than making an attempt to try to bridge the €6 billion gap. The Fine Gael leader and Fine Gael finance spokesperson have consistently said that we should keep taxes low. The difficulty is that if it was to do the opposite of what the Labour Party suggests and keep taxes low, it would have to cut more, including the biggest spending Departments, one of which is the Department of Social Protection. Therefore, there must be cuts in social welfare. The question then is whether those cuts should be to carers' allowances, blind people's pensions, old age pensions or long-term unemployment allowances. Someone must suffer. While I disagree that the very vulnerable should take the brunt, I feel an effort was made to try and make the cuts as equal as possible. I have already commented on why all of the parties said they would not touch the old age pension.
Given this Bill is being opposed rather than amended in any way, the consequence of voting it down would bring down the budget and speed up the departure of the Government. While that might seem logical to the Opposition, it would not be logical in the context of the bailout, the four year plan or investor confidence in the country. I was reading a blog put up by Ronan Lyons recently which did an analysis of the budget in which he pointed out that a person on €100,000 would be hit for five times as much as a person on €20,000, although perhaps it should be six or seven times as much.
The PRSI ceiling is on the way out and higher earners pay more. Also, as I mentioned this morning, Deputies and local authority members are taking a cut in their pay, along with Ministers. Many people did not seem to be aware of this. I suggest that if parties cannot put forward a credible amendment that would ensure money is saved somewhere, they should explain from where the money will come, particularly when they do not wish to increase tax. Do they still agree that a saving of €6 billion must be made? If so, they should ensure they put forward proposals that will demonstrate how the more vulnerable will pay less. We need to ensure that. Both the Labour Party and Sinn Féin have said they oppose welfare cuts and while I disagree we can make the full savings required if we take that perspective, at least those parties are being true to their proposals. However, with regard to Fine Gael, it cannot have it both ways.
I often admire Deputy Gogarty's sentiments because his heart is in the right place, but it is not possible to move an amendment which would reduce the rate prescribed in the Bill. Any amendment would be ruled out of order because it would involve a charge on the Exchequer
I would like to say something that will give Deputy Gogarty the opportunity to vote against the whole Bill if he wants to put the principles he has just enunciated into effect. In his Budget Statement, the Minister for Finance said his objective was "That those who have most, will pay most". Most people in the House agreed with that, including the Minister, but he has dismally failed to achieve that, not because people at the bottom end of the ladder are paying proportionately more than people at the top but because there is a category of people at the top who gain thousands of euro as a result of the provisions of the budget. My complaint is not that these people have not been cut proportionately, but that they make very large gains.
On the day when payments for the blind, the disabled, widows, carers and the unemployed are being reduced, it is a disgrace that the very wealthy will gain thousands of euro from the budget. The universal social charge replaces the health levy and the income levy. The charge is 7% on income above €16,016. The two levies it replaces did not reach 7% until a person was on an income of €75,000. Therefore, the charge clearly hurts the lower paid and on the distribution basis the lower paid are hurt more than the higher paid. That, however, is not the main point of my submission. The problem is that the rate stays at 7%, regardless of how high one's income is. Therefore, self-employed professionals and company directors who have shareholdings in their companies, proprietary directors, who would have paid 11% - with the combined 5% health levy and 6% income levy - on income over €175,000, will now only be liable to pay 7%. They do, however, pay an additional 1% PRSI. Therefore, their net reduction is 3%.
If we take all the tax changes in the budget into account, this group is better off after the budget if their income exceeds €200,000. They are better off by 3% of the difference between €200,000 and what they get. The examples issued in the budget release only show the effect on incomes up to €175,000. The examples should continue up the income scale and look, for example, at the tribunal barrister or the company director with shares in the company on an income of €800,000, many of whom exist as we know from the tribunals. The Deputy need only talk to any of his contacts in the tax management business to know that they have plenty of clients with those levels of income. The person I have described on €800,000 will take home €18,000 more in 2011 than he took home in 2010, and it will operate pro rata.
If the Deputy wants an explanation, it is 3% of €600,000, which is the excess over €200,000. Other examples can be calculated through the very simple sum of 3% of the excess above €200,000. The person in that category on €300,000 will be €3,000 better off. The person on €500,000 will be €9,000 better off and the top of the scale tribunal lawyer on €1 million will be €24,000 better off in 2011 than he was in 2010. Is that fair or just? Is that a matter of the wealthy paying proportionately more?
We are discussing the Social Welfare Bill today and tomorrow the Minister will take the legal power to reduce the minimum wage, but do either the Minister or Deputy Gogarty know that a mother on the minimum wage with three children will be €2,600 worse off when this budget is implemented? The barrister in the tribunal will earn an €24,000 more on his €1 million emolument than he did in 2010. Is there any government?
Could the Government have done this deliberately or is it only able to spend money and does not know how to make adjustments? Any Government that claims it is going to protect the poor and hit the wealthy while creating the budgetary hole I have just described should resign immediately. It is a strange sort of social justice to bring forward a budget like that.
I do not know whether the Minister intended this measure but it appears to me that Fianna Fáil continues to look after its friends. It should erect the Galway tent in front of Government Buildings and get the Green Party Ministers to act as doormen because they will let in more than they keep out. I cannot get over the rank stupidity and incompetence of this decision from a political point of view. Despite all the support available to the Government, it only ran the income examples up to €175,000. Every tax consultant around the country is ringing his or her local Deputy to point out that the wealthy will pay 3% less when the income and health levies are turned into a social charge. They are making enormous gains not in theory or through tax breaks or avoidance, but in hard cash.
I assure the Deputy there will be amendments to the finance Bill. He talks a great game about the poor and making the wealthy pay most. He now has an opportunity to vote against the Social Welfare Bill 2010 on those grounds.
Section 3 provides for a reduction in the jobseeker's benefit, the illness benefit, the disability gratuity, the carer's benefit and the invalidity pension. The consequence of the vote on this section will be that parents will have to choose between buying food and paying a bill. Other speakers have expressed similar concerns but they are worth repeating in order to ensure the Government's supporters in this House understand what they are doing to people across this land. It is shocking to realise that is the case. We were told at the outset those who could afford to pay would pay. I, too, read the analysis to which Deputy Noonan referred. Two economists, Michael Taft of UNITE and Tom O'Connor of the Cork Institute of Technology, have produced papers which demonstrate that individuals on non-PAYE incomes of more than €200,000 will gain substantially from this budget. The Minister is indicating his disagreement with their analysis but I wonder if he has had the opportunity to read their papers. Given that he clearly disagrees with them, I would be grateful if he could point out the errors in their calculations. They convincingly argue that individuals earning in excess of €1 million will enjoy get an additional 5% in this budget. The benefit increases even further if one earns more than that.
Where is the new tax band to capture those on very high incomes? Where is the measure to capture the benefit of the considerable wealth that exists in this State?
It is missing from this budget. Just three short years ago, when the Green Party Deputies sat on this side of the House, I was regularly impressed by their concern about social policy and how public services and the Exchequer were funded. It has clearly become a completely different party in terms of its political and social outlook since the days when its Members sat on these benches.
It was a walkover akin to the kittens sent in to negotiate with the IMF. Where is the compromise? Where are the measures to capture some of the significant wealth that has accumulated in this State since the Celtic tiger? Ordinary people did not benefit from it. Where is the Green Party input on capturing some of that wealth to alleviate the burden on those on lower incomes or welfare payments? I do not see it. Fianna Fáil and the Green Party made no effort to deal with this issue.
They just closed their eyes and walked away. I do not know whether this was because fatigue has set into what is clearly a broken Government. The two parties are barely speaking to each other. The fatigue of 4 a.m. negotiations appears to have persuaded them to give up and walk away.
I would not describe the Minister as a champion because that would be a very big title for him but I thought he had a social conscience for people who are on low incomes or depend on the State for existence. He may have been hoodwinked by the finance people and the many right-wing boys and girls in Fianna Fáil or perhaps he simply did not notice this measure. However, nobody can claim to support the measures contained in this Bill unknowingly because Deputies on this side of the House have convincingly described what is going on. The Minister will see the sharp end of this Bill when he visits his constituents. Many of the people who make representations to my constituency office are in dire straits and if it was not for front line charities like the Society of St. Vincent de Paul, which does outstanding work in Dundalk, I do not know what they would do. These charities cannot help everybody, however. It is ironic that the Government has reduced this State to the point where decent people must depend on charity handouts just to survive. When the Deputies opposite stand up to vote for these measures, they should be sure they know what they are doing.
I wish to speak about social assistance schemes and, specifically, the farm assist payment. The rate of payment has been reduced from €196 to €188 per person. The qualified adult dependant allowance goes from €130 down to €124.80.
I speak for people on farm assist because they are farming very small holdings and live, for the most part, in remote rural settings. I am talking about parts of south Kerry, Connemara and Sligo and Donegal in the north west. They often farm marginal land. The fact that they are receiving the farm assist payment is proof that their incomes from farming are meagre. These people will now suffer from the reduction in the rate of farm assist. They will also be subject to increased charges to get their children to primary and secondary schools. These families take the bus because do not have their own transport. They will also be subject to the new universal social charge. Their farm income will bring them into the social charge band. While they may have been exempt from levies in the past, they are now being brought into the tax net. The universal social charge is not a charge. It is a form of taxation. These people will suffer from the cut in social welfare rates but also because the Government has developed this inequitable social charge.
We must speak for these people. It is clear that Fianna Fáil no longer speak for the marginalised people who live in rural areas. The message sent by the budget to these people is that they may have voted for Fianna Fáil all their lives but they, and their votes, will now be taken for granted. However, I can see from the number of calls I have received from people who are adversely affected by this budget that they are beginning to change their minds. No longer can one fool these people with false promises or take from them in a disproportionate fashion.
A millionaire makes a net gain from this budget while a person making a marginal income from a small farm makes a loss. A family with a child in university will be further caught by the new adjacency ruling for third level grant qualification. Why does the Government need to make these cuts? There is no level of equity in them. The person who shaped this budget cannot have thought laterally about how it would affect people on the margins.
In spite of our political differences, we were always a nation of people who sought to look after our most vulnerable. This universal social charge is grossly unfair. In normal times, we might have accepted the need to reduce payments for farm assist, for example. However, the universal social charge adds a further financial penalty for those people who are living on the margins.
The same is true of the cuts in carer's allowances and in other rates. Why must we consistently attack these people? There is no logical explanation for it. It is a disproportionate cut and is contrary to the canons of taxation. One is supposed to levy tax in an equitable fashion but that has not been done in this case. I accept that we are discussing the Social Welfare Bill, but taxation is pertinent to the argument. People who are earning money and are also in receipt of social welfare will suffer a double whammy because they will come into the net of the universal social charge as well as suffering a reduced rate of social welfare. I had a call today from someone who has a very marginal income and is dependent on a medical card, because of a genuine underlying medical condition. The person had an exemption from the levies but will not be exempt from the new charge. I have sought advice from colleagues as to whether such a person, despite the fact that the household has an income, should apply to the community welfare officer for a home heating grant in the coming months.
We should ensure that households with a marginal income are not penalised further. These people may be in their 30s and 40s and still making large mortgage repayments, which eats up a large part of their disposable incomes. Imposing charges of this nature on those people could tip them over the edge and force them to rely on community welfare officers or supplementary welfare payments in order to sustain life and limb.
We must think more laterally in proposing budgets. We accept that there had to be cuts across the board. We were bought into the idea that there would be adjustments. However, in a proper society one cannot disproportionately affect people who are already marginalised.
I listened to the speech of the Minister for Social Protection. Those of us who know the Minister accept that he has a certain degree of sympathy for people who are underprivileged and marginalised. However, in this instance, he has lost the battle to protect those people. I was more than surprised. I know this is not the budget the Minister would like to have seen, but it is the budget that was brought in. It is a disaster for anyone who is dependent on the State.
The Minister spoke of the difficulty of protecting one group. I do not accept his argument. I do not believe the Government has protected old age pensioners. It has isolated them and, probably, made them more vulnerable in the future. Now, they are sitting out as a group on their own. That is a difficulty for them. The Minister cannot say he has protected old age pensioners when it is not true. The old age pension has not been cut this year, but what the Minister says is not true. People want honesty and openness. As a woman said to me, "It will be awful in the next few years, but we would settle for honesty". We need to be honest about this.
One cannot break up the disability sector into different groups. The blind pension is a different payment from disability payments. It is separate and different and was constructed separately and differently, but one cannot isolate that group. We must accept that there are certain things in society that one must protect. In times of crisis, we must ask what services and sections of society we hold so dear that they will not be touched. We could all rattle them off. They are education, health, people on very low incomes, people with disabilities and people who need additional protection, such as those on farm assist. People on farm assist still populate rural Ireland, despite the fact that they are on very meagre incomes. The Minister must decide not to go below that floor. This morning he referred to this protection but the difficulty is that he keeps moving the floor. If it was set in stone and in legislation, that no one will fall below €200 a week, or any other figure, say, €220, at least we would know. The difficulty is that these are shifting sands. People do not know their position nor where it will all end. They are very fearful as a consequence. The argument for people with a disability needing additional money has been made many times. A person in a wheelchair cannot cut his or her own grass nor clean the windows. Such people need transport and heat and additional medical facilities. We have made the argument many times. It should be a question of what we want to protect and not a question of how much can be cut. If it was looked at from that standpoint, it would have been a different budget.
What has this Government got against widows or widowers? I am always staggered that women or men with children who lose their partner in life at a young age do not qualify for the household benefits package. If one income is unexpectedly lost from a household with small children, whether the income is small or big it is nevertheless a loss. No one wants to be a widow or widower but such a person has to continue alone caring and providing for a family which two people created between them. I refer to the policy of changing widows or widowers to the single or lone parent family allowance which I regard as the biggest con job of the lot. It is argued that the changeover to this payment will enable them participate on a community employment scheme. This scheme lasts for one year, at most, two years and if one is very lucky, for three years. When it finishes, one is suddenly on a means-tested payment and at the mercy of the Government and the whims of a budget. This should not be the case.
Approximately 400,000 people are unemployed and they do not want to be unemployed. They are unemployed now because they were sucked into an industry which was fuelled by the Government but they were left high and dry when the air was let out of it. Many of these people are not in receipt of any payment because they were equally persuaded to go on C2 and C32 certificates. It was a case of become self-employed and you will be fine, which is not a path to social cohesion and definitely not the way to go if we hope to provide a single social pot. I hope the lesson has been learned on that one. These people are now left floundering and desperate to know how they will cope with Christmas. This issue should be dealt with urgently.
The Minister lost the argument when it came to this budget. The people who are depending on this Government to put food on their tables and heat their homes and maybe allow Santa down the chimney this year, will feel the pain as a result.
It was regrettable the budget did not contain a stimulus to get people off welfare. The figure of €90 million is referred to. The Government should encourage enterprise and bring those who can work back into employment. The financial institutions and the banks have closed down viable businesses and the retention of jobs is under threat in these circumstances. The most vulnerable in society such as carers, the disabled, the blind and widows, are trying to live on a fixed income and they do not have any allowance for discretionary spending. With approximately half a million people unemployed, it would be a good idea to bring 30,000 back to work. For instance, I suggest that job-sharing projects could be encouraged. Unemployed people could work in a business which in turn would top up their allowance to the level of the minimum wage. This concept would help to reduce the numbers on the live register.
This budget is all about cuts and it has not provided any stimulus to encourage job creation. The generation of wealth depends on small companies. The 80,000 small companies in the country employing 800,000 people have not received any incentive. If each of those companies were to employ one person, then 80,000 people would be employed. The budget has failed dismally. The Minister did not think outside the box. It is about cuts and more cuts. One job creation incentive would be a reduction in employers' PRSI if they took on additional staff. If 80,000 people were taken off the live register then there would not be a need to hit the most vulnerable in society. We missed the opportunity of offering a stimulus or encouragement or any degree of hope for job retention and job creation. Instead, the most vulnerable people in society, those on a fixed income, the disabled, the blind and widows must bear the cuts. It is a case of back to the future. A cut of €8 per week, over €800 a year over the past two years, is too much of a hit to take.
I am a great believer in the enterprise economy. We have an extraordinary country. In the Coleman centre in Gurteen last week, people recognised the work of community development. I fully recognise the critical role played by the Minister in this regard. I know this budget is not his style of politics because I know he is wants to support job creation.
This used to be a two-tier economy but it is now a multi-tier economy. People on lower incomes never benefited from the boom but they really paid the price of the recession. Those on disabled, blind and widow's pensions cannot work and are on a fixed income. I refer to the money saved to the State by carers who look after parents, neighbours and friends in their own homes. Their work saves the State €2.5 billion. Carers look after people in their own homes up to their dying day. It is invaluable work, giving people a sense of security and independence. It is a very difficult job for very small money and they are being penalised. The budget was an opportunity to recognise these people but they were cast another blow. They never got their due credit even in the good times, the boom times and it is shocking to think they are being penalised in recessionary times.
I suggest the Minister could have picked up this €90 million in several other ways. The taxpayers bailed out the banks. One would then imagine the banks would in turn feel obliged to support small companies and, in turn, companies would retain staff. The State bailed out the banks and they have failed to honour their commitment and have failed to deliver, which has put pressure on employers to hold on to staff. There is an extraordinary contrast when we did the bank guarantee. All of this stems from the bank guarantee; for every action there is a reaction. Following the action of the Government in bailing out the banks to the tune of billions of euro, the reaction now is that the most vulnerable in society are paying the price. Despite what the banks claim, viable companies are being closed with jobs that could be maintained being lost owing to the banks' inability to give working capital to small companies. Jobs are being lost resulting in people signing on for welfare that otherwise would not be necessary. If the banks had given the money initially, these reductions in social welfare benefits would not be necessary. The bank bailout has been the cause of this and the banks have failed to deliver.
Following the Government's action, the reaction now is that the most vulnerable in society are paying the price of bailing out the bankers. It was further compounded today with the announcement of bonus payments to bankers, which is an insult to every hard-working person in the State. The bankers should be giving back their salaries, never mind being given a bonus. If they had any conscience they would say they did not justify getting a bonus. It is an insult to the carers, the disabled, the blind and the widows to hear that bankers are getting a bonus. Those vulnerable people are now paying the price of the banks' greed. For the past two years all we have heard is talk about the bailout of bankers and bondholders, but there is nothing about the bailout of those who need it most. Of all the aspects of the budget, this is the most outrageous. Green Party Members who were talking about parables earlier have an opportunity to put a clear marker down. We want the Minister to reverse these cuts even at this late stage and find another way to raise €90 million by putting a tax on bankers or refusing to give them the bonus proposed today.
I welcome the opportunity to say a few words on the Bill. I wish to follow up on the area mentioned by Deputy Sherlock, the need for support for small farmers. He mentioned Kerry, Donegal and the west generally. I make no apology for saying that the farm assist was needed in areas such as Cavan and Monaghan because of weather conditions and especially the complete collapse in the price of milk to the dairy farmer in 2009. The proposed cutbacks are regrettable as is the imposition of the universal social charge. However, it is even more regrettable that many people who applied way back in 2009 are still going through the appeals procedure. Regardless of what was stated in the Irish Farmers' Journal or elsewhere, many other farmers who wanted to apply were simply told by the personnel that because of their farm size etc. was no point in them applying.
Whether a person qualifies then is a matter for adjudication. Nobody can stop anybody from completing a form and submitting it. If a form is submitted it must be processed.
Any social welfare officer telling any person that he or she has no right to complete a form is in dereliction of his or her duty. I ask the Deputy to give me the names of the officials who are telling people they cannot make an application, I will immediately arrange for them to be informed that everybody and anybody can make an application on a form to my Department and it must be processed.
For those who applied, the proof is there in that they still have not got anything even though they can show clearly by their accounts and their bank accounts that they had no income in that period. I can stand over those facts. Those people have got some break this year because of the increase in milk prices etc., which I appreciate.
I spoke to a senior person in Teagasc this morning and was advised that pig farmers are in absolute desperation. While they may be seen to have big pig units, they have no income because the price of meal has increased so dramatically and the price of product has decreased so dramatically resulting in serious cash-flow problems. For two years they have been promised that a banking structure would be put in place allowing them to get finances to pay for their meal in time, but many of them are six months behind in payments to the millers and are incurring expenses accordingly. These people are in desperation and feel totally isolated. Given that I have talked about this so often, I had hoped there would have been some resolution and something would have been done about it.
It is impossible to believe that widows and widowers have been penalised once again. A widow or widower does not choose to be left without a spouse, often with a young family, a mortgage and whatever else goes with it. Their payments have now been curtailed to the tune of €16 in the past two years, which is extremely unfair. Carers represent one of the most important structures in the country and we are always being told that so many extra carers are getting benefit, which is right and as it should be. So many hospital beds have been closed that there is nowhere for older people to go. If it was not for the caring structures, involving home helps and carers, there would be considerably more trouble than there is and they deserve all the help they can get.
I understand the Minister is considering grading the different levels of disability, which I appreciate. I know people who were brought before the medical people in the past year and refused disability benefit, yet they were never examined or looked at by the medical people. The Department is paying for that examination and if anyone was going to a doctor to have an examination privately he or she would make sure he or she was properly examined. However, when somebody goes into a room and is told it is too cold to take off a coat to be examined and is told afterwards he or she is not eligible, questions need to be asked. There is a need to investigate this situation and those who are more disabled should get more benefits. As Deputy Kathleen Lynch said earlier, someone in a wheelchair cannot mow a lawn or do many other things. While these matters need to be considered, they need to be considered in a structured way so that people cannot tell the Minister or me, as elected representatives, that they have not been given a proper examination or properly dealt with.
Even at this late stage I ask the Minister to reconsider the cuts he is imposing on the widows, the disabled, the blind and others in that category before it is too late. We have heard lectures from Green Party Members, Deputy Mattie McGrath and others. For the past few months they have been telling us over the airwaves how they have stood up for the people. Today they will show if they are standing up for them or not. I cannot believe Deputy Healy-Rae, who is the Chairman of the Joint Committee on Social and Family Protection, would come in and vote in support of this Bill. As he does not often attend that committee, he might not be fully aware of the information we have been given by those with disabilities and others. That information is significant and they have put forward their cases very well. It would be impossible to understand how Deputy Healy-Rae could vote in favour of such measures.
The most obvious lack in the Social Welfare Bill and the budget in general is that of fairness. In the two and half years since this Government came into office, members of the general public have expressed to us at every level that they realise there is a problem in the country and that sacrifices must be made. All they want is that it be done fairly. If it is done fairly, people will accept it, although perhaps reluctantly, but nevertheless they will do so. The problem, however, is that is it not seen to have been done fairly. This is the case when performance-related incentives have been offered to the banking sector at this time. I know this is a hackneyed expression but that is what the people see and they would not recognise that measure as being fair. It is wrong that the sector that is seen to be one of the major players in the downfall of this economy should be rewarded in the run up to Christmas and that the ordinary people who are burdened and hammered by the system are being told they have to take the punishment. A series of punishment beatings - I referred to this last year and the year before - is being administered to the ordinary people, the helpless people, one after the other, and it is not only one beating but a multiplicity of beatings. The cross-cutting nature of cuts that affect them in a multiplicity of ways does not reflect a sense of fairness.
It may sound great in some quarters to say, "Look at that lads; was it not great how we got away with it? At a time when they are wallowing in this above in the Dáil, how did we manage it? Was it not great?" The artful dodgers and cute codgers who managed to circumnavigate the system for the last number of years continue to do so. I blame the Government for that as it had the power to do something about it. In this House, we speak about it - this is the Parliament, not the Executive - we talk, we condemn and we complain. It is a matter for the Government to take action and its members are the only people who can do so.
I read in a newspaper yesterday that auditors are now being instructed to initial, sign off and date their reports. Under the Companies Act, that is the way it was supposed to have been done. It is incredible that it is only now, given that this is provided for under the Companies Act 1990, that auditors are being asked to sign off and initial reports, according to an article in yesterday's edition of The Irish Times. I never saw the likes of that. When the DIRT inquiry was conducted approximately ten years ago, one of its findings was that audits were dealt with in a slipshod and haphazard way. If we think back to the predictions in recent years, certain firms of financial experts use to say of a morning, "The economic fundamentals are good. There is a bright future for the country. Everything is still solid. We are on the right road." Then another report, obviously produced by a friend of theirs, stated the same thing and after another while, another report was produced supporting what was stated in the first two reports to the effect that, "Yes, you are on the road, lads, you cannot go wrong; this is great, let us go to it once again".
They were all wrong but, unfortunately, they are not paying the price. They are standing around and wringing their hands now and blaming the political system. They are not blaming the people who were in the system; they are not blaming themselves but they are punishing the people. The Government was instrumental in that in that it is allowing them to get away with it. What we have witnessed is appalling.
Reference was made by Deputy Sherlock and others to the case of a widower or a widow with a few children in school who gets hammered in every direction in terms of his or her pension and in getting access to supplementary welfare. They are not only subject to one cut. They fail to qualify under new guidelines. The problem for those people is that they are here; they are remaining here and they are now selected as suitable victims in all this charade. It is appalling. We all know people who are in that category - those who do not have any more resources. They would not mind making a sacrifice provided it is done fairly.
What is fair about what we have seen unfold in the past few days? What is fair about this budget? The most unfair part of it is that it is deceitful. It will not achieve its targets and that will be the saddest point of all.
Much was made of the fact that the respite grant has been retained. That is great but nobody has said there are only half the number of respite beds available to meet requirements - some 697 when 1,400 should be available. Nobody on the Government side apologised for that. Nobody said, "We are very sorry about that but there is a little bit of a problem there". If the Government does not get the people one way, it will get them another way. Some people will not get respite care.
Another issue is the number of applicants whose applications are the subject of an appeal, or even the subject of an appeal for a second or third time, whose appeals have been disregarded and who get the same old story back and forth. This applies to all payments but particularly to illness or disability benefits or allowances. We all know money is scarce at present but, as I have often said in the past, lack of funds is not sufficient or a legal reason for depriving somebody of a payment.
It casts a serious slur on the officials of the Department to allege they are not applying the law. I can absolutely assure the Deputy that both the appeals office and the officials in my Department do this on an objective basis. No instruction is given and it would not be legal to give one, other than that this is done in accordance with the law. The Deputy keeps repeating this allegation and it is untrue. I have told him that it is totally untrue.
I suggested that Deputy Ring invite the chief medical officer to a committee and he will explain in detail exactly how this operates. What the Deputy said was unfair and the officials are not here to defend themselves. They are not doing what the Deputy stated. It is not the first time this has been said. This allegation has been made time and again. I have offered to explain this and Dr. Leach has offered to come into the committee and explain objectively how they do this. The Deputy's remark against the officials should be withdrawn until the Deputy has a chance to come in and listen to such an explanation. I hope he would then have the good grace to withdraw the scurrilous remark he made.
If that be the case, can the Minister explain to the House why there are so many cases on appeal now when there has not been that number on appeal previously? Why is that the position? Why is there such a backlog of appeals when there was not such a backlog previously? In all my parliamentary questions to which the Minister replies, he keeps advising of the 44% increase in the applications under the various headings. We all told the Minister's predecessor of the position last year and she told us she had put in place the necessary measures and staff, including relocating staff, to cater with such matters. Why did that not happen or if it is happening, why does this continue to be the position? Why does the Minister pretend that when I raise this issue it is an attack on the officials. This is not an attack on the officials, as the Minister knows well; it is an attack on the system that is depriving people who ordinarily could expect to have their cases heard within a reasonable time.
The Minister is shirking his responsibilities and hiding or whining when challenged. It is time for him to stand up and be counted. If he wants proof I will bring him to the people in my constituency arbitrarily cut off because somebody decided these people were capable of work. If that is the case, medical science has been defied as well because in most of those cases, I and others in the House have medical evidence to back up reports already given by GPs; this challenges those who say otherwise.
It is insufficient for the Minister to skulk away and say that this is unfair, that there is a child in his arms and he cannot be hit. It is time to clear backlogs and ensure that the people being punished in this country - innocent victims - have their claims heard when they should be rather than being forced to wait, as has been the case heretofore.
The Minister should know it is now a time for social healing in this country. The fabric of our society is under pressure and people are looking at each other and blaming each other because they are hurting. They know who is the cause of the hurt but they know they cannot change the Government and must wait for it to walk. They keep asking us why somebody does not do something about the Government. We tell them that we cannot do so as people voted for the Government and we must wait for it to leave of its own accord.
I refer particularly to the need for social healing, which I raise in all seriousness. There is nothing in this section, Bill or budget that in any way contributes to that social healing and understanding required in this country.
I will bring this back to practicalities and we are dealing with section 3. With regard to carer's allowance and payments to blind persons, the disabled and widows, what is the logic behind the cuts? In my dealings with the Minister I have always found him to be a fair and decent man but these actions are illogical.
Deputy Ring made reference to the carers earlier, and we all deal with countless carers in our constituencies. They work in helping elderly parents, a spouse, husband, wife, son or daughter. Invariably, they provide 24-hour care. To qualify for carer's allowance, the work would be extremely onerous and very time consuming. It needs dedication and should come under the concept of vocation. These people save the taxpayer and State significant amounts of money, with the amount quantified at approximately €2.8 billion per year.
Coming back to basics, the Government will take €8 per week from the carer, or €35 per month and €416 per year. That is a significant amount. We can think of the cost in terms of nursing home and hospital expenses and how these are saved. In addition, the sick person is allowed to remain in the home with dignity. I have seen people coming to our office in the constituency and when I visit them in their homes; they are decent and hard-working people who want to look after loved ones. The Government will drive people to a position where they will not be able to afford to do this, and there will be a cost to the State while these people lose dignity.
A widow is effectively operating as a single earner in a home, with many having young children or children in college. In my experience, the group should be one of the more admired because they want to do the best for their children. Their payment has been cut. Children in such families have gone from a position where there were two parents in the house to a position where there is a single parent. With regard to the disability allowance, I have met advocates and those in receipt of the disability allowance, and they want to engage in independent living. The amount of money involved is small but it is similar to the position of the blind person's payment.
I would love to know the Government's logic in cutting these allowances, the cost of which comes to approximately €90 million. What was the logic of putting €3.5 billion of taxpayers' money into the banks without looking for a condition that no bonuses be paid at AIB? I heard the Minister for Finance, Deputy Brian Lenihan, on the radio yesterday being very evasive on bonuses for banks and today it has come into the public domain that a combined sum of €40 million will be paid to more than 2,000 people arising from a time in 2008 when the banking problem was at its peak. What are the bonuses for? This is not a personal attack on the individuals.
The universal social charge should be termed the "universal tax charge". I would like to know exactly what is it supposed to do. It is clearly ill-thought out, as was the income levy. Considering the scheme, there are people who under the health levy were exempt if earning less than €26,000. With the income levy, people on €15,028 were exempt. It is now the case that everybody earning over €4,004 is liable to this tax. Furthermore, the tax benefits the better off, such as those on very high incomes, instead of those on lower incomes.
The minimum wage is to be reduced by €1. The irony is that somebody on the minimum wage working 40 hours a week would earn €17,992 a year, paying €360 a year with the income levy; they would be exempt from the health levy and PRSI. Such people will now earn €15,912 if they work for 40 hours per week but will pay €436 through the universal tax charge. There is something wrong in that case. People on higher incomes, such as those on €200,000, gain on the levies that were being paid. On the old scheme, somebody earning over €175,000 per year earned 11%, with 5% on the health levy and 6% on the income levy. They now pay 7% and if they are self-employed, they pay an extra 1%. They will gain 3% if they earn more than €200,000 per year. There is something wrong in that respect.
This indicates that the Government has not learned anything in its social policy and that it is tailored to the Galway tent. If not, the Government is so incompetent it did not realise the impact of this measure. Somebody on €300,000 per year will be €3,000 better off. A person earning €500,000 per annum is €9,000 better off under the universal tax charge. The calculation is simple: €500,000 minus €200,000 leaves €300,000 and a 3% levy on the latter sum amounts to €9,000. If a person is earning €800,000, the application of the 3% rate on the difference between €800,000 and €200,000 leaves him or her €18,000 better off. I suggest that the Minister re-examine the proposal.
The Minister argues he is trying to encourage people to return to work by reducing the minimum wage. The effect of the budgetary proposals will be that a person on the minimum wage will have less income and will pay more tax. A person working a 40 hour week on the minimum wage earns €346 per week and pays €360 per annum in levies. Under the proposed measures, he or she will earn €306 per week and pay €436 per annum under the so-called universal social charge, which is, effectively, a universal tax charge. Moreover, everyone who earns more than €4,004 will be subject to the tax charge.
The flaw in the current system of income levies is that those earning €26,001 pay 4% on the entire sum while those earning €15,029 pay 2% on the full sum. A similar anomaly is built into the proposed system, with those earning €4,004 being required to pay 2% on the balance up to €10,000.
Having found that the system is not integrated, the Government has proposed to reduce the minimum wage. How will we encourage people to come off social welfare by reducing the earnings of those on the minimum wage and increasing the tax they pay? The Government should have considered the matter from the viewpoint of an employer. If it had done so, it would have concluded that reducing the minimum wage and increasing tax for those who earn the minimum wage creates a disincentive to work. It should have abolished the 8.5% PRSI rate for lower paid workers. As the Minister is aware, the cost of an employee to an employer is gross pay plus the employer PRSI. He should have taken a progressive position.
The universal social charge measure has been rushed.
The Deputy is arguing that if an employer employs someone at the new minimum rate, he or she should not pay employers PRSI, whereas if he or she employ someone on the old minimum wage rate, he or she would pay PRSI. That is a crazy idea.
No, that is not what I am arguing. The minimum wage is too low to be reduced. If the Government wants to reduce costs for employers, it should abolish the 8.5% PRSI rate for a number of years to encourage employers to retain staff and recruit new employees.
What does the Minister mean? My point is that one must approach this matter in an integrated manner. Will the Minister justify reducing the minimum wage and increasing tax for those earning the minimum wage? These are the facts. I ran the numbers to show that those earning €17,992 per annum working a 40 hour week at an hourly rate of €8.65 pay a 2% levy or €359.84 on annual earnings. If the hourly rate is reduced to €7.65, they will earn €15,912 for a 40 hour week and pay a levy of 2% on the first €10,036 and a 4% levy on the balance. They will pay €435.76 under the new system. How can this system be described as progressive, especially when someone earning €200,000 will gain under the universal social charge? The position is unjustifiable and suggests the Minister did not run the numbers or consider the outcome of the proposals in depth, as any Government should be required to do.
In the cold light of day the Minister will see that the measures are unfair and regressive and do not provide an incentive to take up employment at the lower rate. The underlying theme of all budgets is whether they are fair. While I accept we are in a financial crisis and must find savings and new means of generating revenue, we must do so in a manner that avoids driving the economy into the ground or leaves the less well-off struggling even more. I ask the Minister to examine this issue.
Will the Minister explain the logic of reducing child benefit for the third child by €20 when the reduction for other children is €10? I have four children.
I appreciate the position and will make a relatively short contribution.
I will address the measures pertaining to the carer's allowance. Describing the budget as a "slap in the face" for family carers, the Carers Association, in its press statement, noted the following:
The Carers Association is appalled that all the assurances they received from back bench TDs that the Carers Allowance would not be touched in the Budget have come to nought. Family Carers who look after their loved ones in the home save the State an estimated EUR2.8 billion per year.
In return carers receive €212.00 per week, which is not sufficient in many cases to make ends meet. All of us will have seen the pressure many carers in our constituencies are under for various reasons, including financial reasons. The statement continues: "This latest cut of 3.8%, EUR8.05 per week, will have a real impact on the welfare of a very substantial proportion of family carers, already finding it difficult to meet everyday bills like heat and electricity, essential to maintaining the well-being of their loved ones".
We know how demanding the charges for heating and other essentials are and how they impact on the carer because of the loved one's circumstances.
Much strong language is used in the House at times. I will say merely it is extremely regrettable that the Government has reneged on its promise-----
This is the challenge. The problem is that if one does that and yet must raise the same amount of money, if one excludes the 260,000 people in question, one must then take from the other categories which puts an unfair imposition on the unemployed.
I can repeat my Second Stage speech. Fine Gael clearly pointed out that such money could be available if there was an evaluation of the various schemes and the 20 groups involved. They could be rationalised, giving more efficiency. There are heavy savings to be made in administration that would yield several times the cost of the cuts the Minister is to apply to the vulnerable people-----
The proposal to cut the carer's allowance goes against the Minister's and the Government's policy to provide care in the home for as long as possible for older people and people with disabilities. This is another instance of the massive chasm between Government policy and Government practice. In one area there is a policy but this is a practice that goes against that policy. This gap has widened in each of the past three budgets.
In most situations, family carers are relatives, friends or neighbours who provide unpaid care for people and children with a disability, with mental illness or a chronic condition, or for frail old people. Given that carers must be constantly available due to the heavy demands and responsibilities of caring, many are unable to take up employment and therefore are reliant on Government supports. They made a decision to ensure their loved ones are taken care of in their home environment. Let us remember that vulnerable people want to feel, as far as possible, that they can have care in their homes. All our families and extended families have experience of and have responded to that need, that natural human instinct, the desire to be in our own place.
In addition, there are significant financial costs associated with caring. I mentioned raised heating costs, the dietary requirements, transport and medical expenses which must often be met by the family carer. Carers provide 3.7 million hours of care each week and save the State more than €2.5 billion each year. The average full-time carer saves the State more than €44,000 per year. We must put in context the contribution carers make. The saving made by family carers is even more apparent when one considers the cost of privately sourced care which comes at approximately €22 per hour. The essential cost of nursing home care is in the region of €800 to €1,000 per week and the cost of acute hospital care is in the region of €5,000 per week. I raise that point to put in context the contribution carers make to the State, to society and above all to the most vulnerable people who are under attack by the Government in this budget.
I shall conclude because Deputy Flanagan wishes to contribute. Family carers are already propping up Ireland's fragile health system but the recent announcements not alone by the Government but by the HSE highlight the expanding role they will have to play in the future. There will be fewer patients in our hospitals, shorter hospital stays and an increasing focus on community care. Research has shown that 90% of community care takes place within the home, yet carers will now be expected to carry an even greater responsibility for community care provisions with a lesser contribution from the Government and the social welfare system.
I could deal similarly with the other categories that are counted as vulnerable but I confine my contribution to carers. Although all groups are equal, I wish to make a case for carers because of the contribution they make and the difficulties and pressures they have. I have seen burn-out and high levels of anxiety which sometimes move towards depression because of pressures the carer may have. The Minister should revisit this area.
I am grateful for the opportunity to make a very brief contribution and add my voice to earlier speakers who condemned the Government's actions with particular reference to the section of the Bill we are debating, section 3, and specifically about carers and those in receipt of the pension for the blind. There is an eerie irony that this issue is being debated in the Dáil on the same day that bank executives and senior bosses who contributed in no small way to the destruction of our economy are divvying up a Christmas bonus of €40 million between them while we are engaged on savage cuts for the most vulnerable and needy people in society.
The Government is against those on welfare but this budget is particularly anti-children. The cuts in child benefit are harsh and biting and will affect children in a fundamentally unfair way, particularly in cases where there is no safety net. I ask the Minister to deal with this in his reply before we finally dispose of this Bill. There is no safety net to assist families who have children on the poverty line. The qualified child increase has not been increased in any way in this budget, nor has the family income supplement. As the Minister will be aware, in 2009 the €26 weekly rate of qualified child increase was paid in respect of 363,000 children and a further 129,000 children were involved at the €13 rate. Now there are 615,000 children availing of this basic child payment rate. This is fundamentally unfair. I ask the Minister to tell the House and reassure the people that he will not proceed with these cuts as proposed. How can he say it is fair or just to treat a family on €19,000 in the same way as a family on €120,000 a year, with reference to the payment of child benefit? This is seriously unjust and unfair. It will ensure the Government continues to foster injustice and unfairness in its attitude towards children and child policy. It will ensure an unhappy Christmas for hundreds of thousands of children in this country. The Government had the choice; it made the wrong one.
I ask the Minister to deal with the following matter, which I cannot understand. A value for money review of child income supports was published by the Minister's Department earlier this year in advance of the budget. This recommended a policy shift towards an integrated child income support payment but this was not acted on in the budget. Why was that? The child poverty index will show that children in this country are living in consistent child poverty at totally unacceptable rates. In 2008, it was estimated that 6.3% of children were living in child poverty but this has risen to 8.7% in 2009 and will increase further and substantially in the context of the changes the Government is introducing. If further injustices towards young people and children are added in the general budget, as with the cut to adult social welfare rates, the 24% cut in the youth justice budget, the cut in the school transport budget and the cut to special needs assistants, the Minister and his colleagues will do a grave injustice to the children of this country.
Families receive no concession from this budget. Children continue to live in deprivation and poverty. The Minister still has time to withdraw some of the more unfair and unjust aspects of this budget. I ask him to accept the amendments put forward by Deputy Ring to ensure at least a modicum of fairness, in which the Minister has failed to engage with this Bill.
It is an ideology of allowing some people to become very wealthy that is behind some of our economic problems. In terms of addressing those economic problems, we have an opportunity to re-balance the distribution of wealth in our society and to narrow the gap between rich and poor. If we were to take that approach, we would not cut social welfare, which is why the Labour Party opposed social welfare cuts.
The social welfare rates of payment should have been the last thing to go after. The point is that people on those payments spend their money in the economy. People who are wealthy will save their money and reduce their debt but those on social welfare spend their money in the domestic economy. We have lost an opportunity in this regard.
Last year, when there was a flat rate cut to child benefit, as noted by Deputy Charles Flanagan, a re-balancing measure was taken by the Government in regard to the family income supplement. If it thought it important enough to do it last year, why is the Government not doing the same this year? While the principle of universal child benefit is very important, if the payment is to be reduced, the Government should have protected the most vulnerable children. Many other measures could have been taken to reduce the social welfare bill. They would take a bit of thought and work but they would not necessarily involve cutting the rates as proposed here.
I do not have much time to address all of the issues raised. On the general situation, since 2004 carer's allowance has increased by 46.1% for people under 66 years of age, jobseeker's payments increased by 39.5%, disability allowance increased by 39.5% and one-parent family payment increased by 39.5%. In the same period, the cost of living has increased by 11.8%. Even with these adjustments, therefore, there have been considerable gains since 2004.
Many issues were raised in the debate. In regard to carers, I reiterate my view that the most important thing to do for carers was to protect the architecture that exists in terms of all of the benefits they have-----
That is what I am talking about - the people who receive the half-rate payment and receive an underlying social welfare payment, those who get an extra payment for caring for more than one person and those on the respite allowance. There are very generous income disregards and the payment is considerably higher than the payment for disability, invalidity and so on. Therefore, what I sought to do and have done was to make sure those arrangements that are so valued by carers are kept intact.
A suggestion was made earlier that, among the many easy answers, we would put a levy on pension funds. As Minister with responsibility for pension funds, I know many pension funds throughout the country are already in deficit and to add another pension levy would only exacerbate the situation. In fact, the budget seeks to do the opposite and to try to make defined benefit and defined contribution pension funds more solvent so they can give people fair returns for their investments. The easy solution would be robbing Peter to pay Paul.
I clearly outlined, as did the Government in the four year plan, that cutting rates further should be the last resort and that we were not going to accept there was an inevitability to cutting rates. Fine Gael is inconsistent on this point. Its members keep telling me there are many other ways of saving money, such as fraud control, but they then sign up for a €14 cut in jobseeker's allowance and benefit.
On the issue of who has money and who does not, I read a recent newspaper report - one would not know whether to believe anything in newspapers these days - that suggested pensioners have €16 billion in savings in the banks. This is, of course, very important to them, and many people have a nest egg of life savings. While it is important we would recognise people have a right to put away life savings, nonetheless, it is an interesting point.
I am always consoled when I hear some of the more bizarre policies of Sinn Féin - policies that would break the State and would leave us literally with no money to pay for services.
We asked for the devolution of all finance-raising powers, including social welfare. The Government did not bother with that when it was negotiating the Good Friday Agreement. It was content to sit back and wait.
Sinn Féin always consoles me. I know one point about it - when you give it responsibility, it gets awfully hard-headed and very responsible.
Many issues were raised in regard to tax. I always believed we should address urgently the problem associated with those on very high incomes. It was not that they were paying at a rate of 52% or 55% because, in many cases, they were paying at a rate of 0%. The Government, in this budget and in the next three or four, will close down the means by which those with high disposable incomes can pay no tax on a large part of their incomes.
In this budget, we have made progress on the issue of pension funds, pension fund limits and ways of putting money into pension funds. We have moved on the issue of tax shelters.
We are moving on tax shelters and on the thresholds for inheritance tax so that when money transfers, there will be a bigger take for the State.
As Minister for Social Protection, I believed it was time to rationalise the PRSI contribution. This means adjustments. What we have done is ensured that everybody who is employed or self-employed, other than those on very low incomes, and public servants will pay 4%. The advantage of having that simple system in the longer term is that it allows one to conjoin the rest of the tax system such that there will not be a rate of 3% for the self-employed, but with no limit, and a rate of 4% for an employee, but with a limit, as used to be the case. In eliminating the old system and having a single rate of 4%, it makes it easier for future Governments to change tax policy without the social welfare contribution, because of its anomalies, creating difficulties.
I have always felt it was wrong to attach non-medical entitlements to the medical card. By attaching entitlement after entitlement to the medical card, one puts people in a poverty trap that we have all encountered. People were afraid of doing overtime not only because it would have affected medical card entitlements but also because it would have affected PRSI and other areas. A rational debate is warranted on this. I believe it is better to keep the medical card for medical entitlements and have a more coherent tax system for entitlements not attached to the medical card. In time, when people look back at the old arrangement, they will say it was bizarre and that it is better to pay tax relative to income, not based on whether one has a medical card. When one makes changes in this area, one can encounter hard cases but, in the longer term, a system with a single rate of 4% is better. The system with the 36 rates of PRSI, which I do not believe anybody fully understood, is now much simpler and more understandable, which is important.
I am a little surprised by the Labour Party's great objection to the universal social charge.
That may be so. I would like to see how the Labour Party would raise another €2 billion at the top end without having rates of tax of 80% or 90%. However, we will be waiting for the Labour Party.
We are involved in auction politics in that two parties are putting forward diametrically opposed policies. One is to try to court the supporters in one camp and the other is to try-----
As it is now 4.45 p.m., I am required to put the following question in accordance with an order of the Dáil of this day: "That each of the sections undisposed of is hereby agreed to and that Schedules 1, 2 and 3 and the Title are hereby agreed to in Committee, that the Bill is accordingly reported to the House without amendment, that Fourth Stage is hereby completed and that the Bill is hereby passed."
As a teller, under Standing Order 69 I propose that the vote be taken by other than electronic means. The reason I give for this is the shameful measures that are before the House. It gives those who criticised the measures and have just voted for them an opportunity to be seen in public voting for the measures that they have criticised.
Question again put: "That each of the sections undisposed of is hereby agreed to and that Schedules 1, 2 and 3 and the Title are hereby agreed to in Committee, that the Bill is accordingly reported to the House without amendment, that Fourth Stage is hereby completed and that the Bill is hereby passed."
The Dail Divided:
For the motion: 80 (Bertie Ahern, Dermot Ahern, Michael Ahern, Noel Ahern, Barry Andrews, Chris Andrews, Seán Ardagh, Bobby Aylward, Joe Behan, Niall Blaney, Áine Brady, Cyprian Brady, Johnny Brady, John Browne, Thomas Byrne, Dara Calleary, Pat Carey, Niall Collins, Margaret Conlon, Seán Connick, Mary Coughlan, Brian Cowen, John Cregan, John Curran, Noel Dempsey, Jimmy Devins, Timmy Dooley, Frank Fahey, Michael Finneran, Michael Fitzpatrick, Seán Fleming, Beverley Flynn, Paul Gogarty, John Gormley, Mary Hanafin, Mary Harney, Seán Haughey, Jackie Healy-Rae, Máire Hoctor, Billy Kelleher, Peter Kelly, Brendan Kenneally, Michael Kennedy, Tony Killeen, Michael Kitt, Tom Kitt, Brian Lenihan Jnr, Conor Lenihan, Michael Lowry, Tom McEllistrim, Mattie McGrath, Michael McGrath, John McGuinness, Martin Mansergh, Micheál Martin, John Moloney, Michael Moynihan, Michael Mulcahy, M J Nolan, Éamon Ó Cuív, Seán Ó Fearghaíl, Darragh O'Brien, Charlie O'Connor, Willie O'Dea, John O'Donoghue, Noel O'Flynn, Rory O'Hanlon, Batt O'Keeffe, Ned O'Keeffe, Mary O'Rourke, Peter Power, Seán Power, Dick Roche, Eamon Ryan, Trevor Sargent, Eamon Scanlon, Noel Treacy, Mary Wallace, Mary White, Michael Woods)
Against the motion: 75 (Bernard Allen, James Bannon, Seán Barrett, Pat Breen, Tommy Broughan, Richard Bruton, Ulick Burke, Joan Burton, Catherine Byrne, Joe Carey, Deirdre Clune, Paul Connaughton, Noel Coonan, Joe Costello, Simon Coveney, Seymour Crawford, Michael Creed, Lucinda Creighton, Michael D'Arcy, John Deasy, Jimmy Deenihan, Pearse Doherty, Andrew Doyle, Bernard Durkan, Damien English, Frank Feighan, Martin Ferris, Charles Flanagan, Terence Flanagan, Eamon Gilmore, Noel Grealish, Brian Hayes, Tom Hayes, Michael D Higgins, Phil Hogan, Brendan Howlin, Paul Kehoe, Enda Kenny, Ciarán Lynch, Kathleen Lynch, Pádraic McCormack, Shane McEntee, Dinny McGinley, Finian McGrath, Joe McHugh, Liz McManus, Olivia Mitchell, Arthur Morgan, Denis Naughten, Dan Neville, Michael Noonan, Caoimhghín Ó Caoláin, Aengus Ó Snodaigh, Kieran O'Donnell, Fergus O'Dowd, John O'Mahony, Brian O'Shea, Jan O'Sullivan, Maureen O'Sullivan, Willie Penrose, John Perry, Ruairi Quinn, Pat Rabbitte, Michael Ring, Alan Shatter, Tom Sheahan, Seán Sherlock, Róisín Shortall, Emmet Stagg, David Stanton, Billy Timmins, Joanna Tuffy, Mary Upton, Leo Varadkar, Jack Wall)
Tellers: Tá, Deputies Cregan and Curran; Níl, Deputies Stagg and Kehoe
Question declared carried