Michael Moynihan (Cork North West, Fianna Fail)
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Question 7: To ask the Minister for Social Protection the areas she identified for potential reductions in the comprehensive spending review in view of the Taoiseach's refusal to clarify the details of same; and if she will make a statement on the matter. [29155/11]

Joan Burton (Dublin West, Labour)
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Sustainable public finances are a pre-requisite for maintaining an adequate system of social protection as well as achieving future economic stability and growth. For these reasons, the State must pursue a determined deficit reduction strategy. Accordingly, there will be an on-going requirement to curtail expenditure in my Department and in all other Departments, in 2012 and in later years. All Departments are aware that the Government has to bring forward major savings across the full range of public expenditure and to prioritise resources very carefully. The purpose of the Comprehensive Review of Expenditure is to assess the effectiveness and value for money of spending programmes across all Departments and agencies.

The appropriate level of overall expenditure by my Department in the years ahead will be considered in the context of budget 2012 and subsequent budgets. All considerations will be informed by the commitment in the Programme for Government to maintain social welfare rates and by the Comprehensive Review of Expenditure. My Department has forwarded preliminary savings options to the Department of Public Expenditure and Reform as part of the Comprehensive Review of Expenditure. My officials continue to engage with the Department on the options outlined in the review, with a view to preparing material for the Economic Management Council and the Government.

All decisions arising from the review will be decided in the final instance by Government. As is the norm during the initial stage of the budgetary process, details will not be released in advance of Government decisions. My ministerial colleague, Deputy Howlin, has already indicated that he intends to publish the reports submitted as part of the review process following the finalisation of the budgetary process later this year.

Barry Cowen (Laois-Offaly, Fianna Fail)
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I thank the Minister for her reply. I am glad to see that she remains consistent in this regard, in spite of repeated questions from myself and others throughout the course of the year. The problem is that the Tánaiste is also consistent.

One hears members of the Government refer to the Memorandum of Understanding. Some are set in stone and some are not. The agreement was made against the background of the necessary austerity that was required because of the interest rate that was struck at that time, but subsequently the interest rate has been reduced, not necessarily by design, by accident. The savings the State will make on foot of the interest rate reduction have been bandied about as €1 billion per annum. In the discussions of our finance spokesperson with the Troika, it was stated that any austerity measures should not impinge on the less well off or those most in need.

Meetings are taking place this week with the relevant authorities and the Troika. Could the Minister have asked those who are negotiating on our behalf to secure a condition from the Troika that due to the savings, there is wriggle room for the Minister to honour the commitments that she and her partners in Government made?

Joan Burton (Dublin West, Labour)
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The most effective way of reducing the cost of social welfare expenditure is to get people back to work. The difficulty that the budget labours under is that when the then Government made the forecasts this time last year and signed off on the Memorandum of Understanding, it estimated a higher growth rate but more importantly from the point of view of the Department, that only 405000 people would be unemployed, whereas unemployment figures are higher and are running at 45,000 ahead of what was estimated. To try to reduce expenditure we have to focus on getting people back to work, something I have emphasised.

The IMF, because of its experience in other countries, is very conscious of the role played by social expenditure and social welfare expenditure in demand in domestic economies. Therefore, it has emphasised its understanding of that. The ECB, as part of the troika, is very interested in seeing moneys it has set aside for Ireland being secured as quickly as possible.

Barry Cowen (Laois-Offaly, Fianna Fail)
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The Department of Social Protection offers every alternative option and support system to people to get them back to work, the area which is relevant. There were outlandish predictions made by the Minister's partners in government allied to the NewERA project and the number of jobs it was going to create. It has become more realistic in recent months. Funding for it is up in the air. If the proposed sale of assets is to yield funds will they be used for NewERA or to pay the debt? I ask the same question in regard to rate reduction. This week's negotiations could yield a dividend for the State of by virtue of job creation and the rates which the Minister and Government have continuously asked to supplement.

Joan Burton (Dublin West, Labour)
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In the regard to the memorandum of understanding and the deal with the troika we have to balance two concerns. We have been doing well. We were told renegotiation of the interest rate was impossible by Fianna Fáil when it was in government. I predicted it could be done and it has been done. We now need to negotiate the structure of the promissory note to Anglo Irish Bank which totals €3 billion a year plus interest of, I understand, 8%. It is very expensive for us as a country.

The troika, in particular the IMF, was conscious that the best way of meeting targets is to have growth and job creation in the economy. Every person who returns to work comes off social welfare and starts to pay income tax, as well as beginning to spend money. It is probably worth between €15,000 and €20,000 to the economy. It is important that we pursue a twin track strategy and deal with the debt and deficit, as well as getting people back to work.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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I presume, based on the Minister's comments, rent supplement and RAS have been identified as part of her Department's budget cuts under the spending review. Would the Minister agree transferring people from the rent supplement scheme to RAS is like moving the deck chairs on the Titanic?

Has any consideration being given to front-loading rent supplement to local authorities, along with asking the Minister for Finance or NAMA to transfer properties? Such a change would allow local authorities to get people off rent supplement and the RAS scheme, which would result in longer term savings. It would be a more sustainable review of spending than an overnight cut which has been contemplated.

Joan Burton (Dublin West, Labour)
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I gave my view earlier. Rent supplement should be transferred to local authorities. It was meant as a temporary housing support for people in rented accommodation who lost their jobs. It has become a permanent feature of the system, encompassing 95,000 people and costing approximately €500 million this year. The other major problem with rent supplement is that it can constitute a severe employment trap, particularly for a couple with two or more children. To rent a house for such a family in many Dublin areas would cost €1,000. Somebody moving to work from rent supplement could lose €12,000 a year, whereas if he or she was on a local authority differential rent he or she would be able to predict roughly the level of rent proportional to his or her income. It is an important reason to reform the system and move it from social welfare to local authorities.