Feargal Quinn (Independent)

I welcome the Minister of State to the House. Much of what he said in his contribution is welcome, particularly his reference to the Bill closing off many tax avoidance schemes some of which are quite aggressive in sheltering the income of some high earners. Nobody will disagree with that. However, I have a problem with the area of child care as mentioned by Senators John Paul Phelan and Mansergh. The world is changing. In many families both partners are now working. Two relatively young women who work in my company told me that although they work in a company that runs a supermarket, they only spend a quarter of their income in the supermarket because of their way of life. In both cases their husbands also work. They refer to themselves as "CTT" customers. When I asked what this meant I was told it referred to someone who could not cook, had not time to cook and was too tired to cook at the end of the day. They pointed out that this Bill ensures that if they buy something hot in the supermarket, they must pay VAT. Buying something cold and cooking it at home incurs no tax. I am aware I have a vested interest, which I declare, but this is the sort of ridiculous provision that should be avoided if we do not want to be regarded as being petty.

This Bill was hailed as a new departure for the Government. It was supposed to be the first step towards creating a more balanced approach, allowing more room for social inclusion measures as opposed to the exclusive emphasis on tax cutting that we saw in previous years. It is this aspect of the budget and the Bill that I would like to address. While I welcome the new emphasis on social inclusion, I have reservations about the best way to achieve the results, which we all desire. We need to look beyond merely increasing the amount of social welfare payments. While I do not oppose such increases in themselves, I oppose the assumption that they address the underlying problem. I believe Oxfam used the slogan "Give a man a fish and you feed him for a day; teach a man to fish and you feed him for life." Social welfare payments are like giving someone a fish. Social welfare increases address the symptoms, not the problem itself. To do that we need a more targeted approach, and I see very little sign of that approach in the Bill before us.

We should attack two aspects of the problem in particular, unemployment and educational disadvantage. I am sure Senator Ryan will also touch upon this point. Both matters go to the heart of the social inclusion problem. Neither can be solved by merely increasing State handouts. I am a member of an NESF working group on unemployment. Whenever I tell people that, I am usually met with incredulity that such a body exists as they believe unemployment is a thing of the past. As we have the lowest unemployment rate in the EU they believe the problem is now skills shortage rather than unemployment. Unemployment is still very much a problem about which we are doing very little. With a workforce rapidly approaching 2 million, an unemployment rate of 4% involves many thousands of people. Even when we exclude people who are not genuinely unemployed — for example criminals or those who make a living from the black economy — we are still left with a sizeable number of Irish citizens who cannot get a job. These people tend to be concentrated in certain areas, so that today we still have communities where the rate of unemployment is very high, some of it dating back two or even three generations. Islands of poverty exist in our overall sea of affluence.

While we can relieve that poverty to some extent by increasing social welfare benefits, in doing so we do nothing to attack the basic underlying problem, which can only be addressed by having a job. Only by getting these people into employment — I nearly said getting them back into employment, but for many of them the reality is that they have never had jobs — can the basic problem be addressed, once and for all. Why can they not get work, when employers up and down the country are crying out about labour shortages? Our new affluence has shown us that we can have unemployment at the same time as a labour shortage. The main reason such people cannot get jobs is because they lack the skills or aptitudes a job requires. They are repeatedly passed over because they do not have the skills, experience or sometimes even the basic motivation that an employer will seek.

While this fact has radically changed the nature of our unemployment problem, we have not yet fully adjusted to the change. In the old days, we could define our unemployment problem simply in terms of a shortage of jobs. At that time, creating more jobs was seen as the beginning and the end of the issue. That is no longer the case. The challenge now is to equip our unemployed people with the skills and the aptitudes that will enable them to take a place in the jobs market. Despite all the lip service we have paid in the past to retraining, the hard truth is that we are not very good at this task. We are still thrashing around in search of effective ways of training unemployed people for work.

It is clear that any successful approach will be expensive. Each unemployed person must be treated as an individual case, not just another person in a queue. As important as skills training is the motivational aspect, which should involve counselling to help build the recipient's self-esteem and foster confidence that the world of work has something to offer.

An effective approach to the problem of unemployment will focus not so much on increasing social welfare payments but on massively increasing our investment in training and motivating people who are out of work. If this is not done, we are effectively writing off tens of thousands of our fellow citizens. However greedy the Celtic tiger has made us, we have not reached the point where we are ready to do that.

Educational disadvantage is strongly linked to unemployment. This issue has not been tackled effectively and there is no change in this regard in the Bill. Such failure means we are creating the unemployed of tomorrow. However heartless it is to write off unemployed adults, it is particularly iniquitous to condemn some of our children to a future life of unemployment and poverty. We boast that our education system is open to all but that is true only in a superficial sense. A sizeable proportion of our children are already educationally disadvantaged on the day they begin their schooling.

Furthermore, the system serves to increase rather than alleviate that disadvantage. It is mainly children who enter the system disadvantaged who encounter literacy and numeracy problems at a later stage. As a consequence, the doors to further learning are closed against them. It is little wonder so many of them become disillusioned with their school experience, as evidenced in poor attendance rates and high drop-out rates. It is mainly disadvantaged children who make up those thousands who fail to make the transition from primary to secondary school every year. Of those who survive, many fail either to take the junior certificate or to pass beyond it. Finally, it is mainly those children who start out disadvantaged who are numbered among the truly shocking figure of 20% of 17 year olds who do not take or pass the leaving certificate.

For as long as we allow this to continue, we condemn our nation to having a hard core of unemployed adults, not because there are no jobs for them but because they cannot match up to the jobs that exist. This is not a situation applicable to only a few but to many thousands, year after year. How can we square this situation with the affluence of our Celtic tiger society? We simply cannot do so. However, we refuse to address this problem properly, perhaps because the sheer scale and cost of the necessary action frightens us.

Since we first acknowledged the existence of this problem, we have thrown small amounts of money at it through a succession of pilot schemes of one type or another. However, we have always lacked a simple, joined-up vision which recognises this as a problem that must be solved, whatever it takes. The Government's wish to reinvent itself as a new, caring Administration is something we all applaud. However, if it is to have any real results on the ground, what is needed is a targeted approach to two of the most intractable problems that lie at the heart of social exclusion, unemployment and educational disadvantage.

I hope future budgets and finance Bills will address both these issues more realistically. This Bill does not adequately attempt to do so. If enough of us can concentrate our efforts in this regard, we may hope to influence future budgets.