Sheila Terry (Fine Gael)

I welcome many of the provisions in this Bill and compliment the Minister on providing the necessary increases. It is a good budget which, I hope, will address many of the inequalities in our society that force people to live in poverty. We will have to wait to determine the impact, if any, of these increases. Before addressing specific provisions, I want to discuss the extent to which social expenditure is eliminating poverty in this country and whether this Government's policies are enhancing people's living standards and social participation. Are the policies reducing inequality in our society?

To date, Ireland has had a very low rate of social expenditure, which comprises spending on health and education as well as social welfare payments because these areas also impact on people living in poverty. We have spoken in this House of studies which revealed that, out of 15 OECD countries, Ireland had the lowest net total social expenditure in 1997, after Japan, South Korea and New Zealand. I will await the opinion of economists on how this budget can influence and, hopefully, change that situation.

Given our economic growth over past years, the Government's low level of social expenditure is unacceptable. The gap between rich and poor has continued to grow. Income poverty particularly affects the elderly, people with disabilities, lone parents and households with no one in employment.

Studies show a strong correlation between social expenditure and income inequality and that countries with higher levels of social spending tend to have lower levels of inequality. It has often been argued here that Ireland's good economic growth and low unemployment occurred because it has neither invested excessively in social protection nor prioritised income equality. However, competitiveness and high employment levels are not irreconcilable with higher social expenditure and greater income equality. Many high spending countries in the EU have also achieved very healthy economic indicators, such as, low unemployment, high economic growth rates, low levels of debt and strong competitiveness. That demonstrates that other countries can do it.

Social expenditure benefits not only the less well-off but also impacts on the wider society and economy. Lessons are to be learned, for example, from recent events in France because we do not want to repeat the mistakes made there, which arose from the isolation of people and communities. Low levels of expenditure in one area can result in higher spending in areas such as prisons and law enforcement.

The high levels of income inequality in Ireland are first and foremost the result of an increase in the gap between the incomes of those in employment and those on benefits and pensions. In order to reduce inequality in Ireland, this gap will have to be narrowed. It is questionable whether relative poverty can be successfully and consistently prevented in systems which rely strongly on means-tested and non-indexed flat rate payments, such as Ireland's social security benefits.

A basic prerequisite for preventing relative poverty among those outside the labour force is a linkage between benefits and payments on the one hand, and prices and wages. This would ensure that those deriving their incomes from benefits can keep up with wage earners, rather than fall behind in terms of income distribution, as has happened in Ireland. While all benefit incomes should be adjusted to ensure they keep up with increases in incomes from work, the incomes of lone parents and older people are particularly urgent priorities as these groups suffer disproportionately from income poverty. I accept that the Minister has taken steps to address that gap.

Money will be required if greater equity is to be achieved. I welcome the provisions made by the Minister for Finance in the budget to deal with tax exemptions. We need to see an assessment of the extent and impact of tax exemptions in the tax and welfare system. A value for money audit by the Comptroller and Auditor General is urgently required so we can determine what is happening. We must change the way we manage tax exemptions because some people are benefitting to an unacceptable extent. Any savings made from tax exemptions should be directed to the less well-off.

The Minister will be aware that officials from his Department and the Department of Finance and members of the Pensions Board attended a recent meeting of the Joint Committee on Social and Family Affairs. Many of the questions put by committee members at that meeting were left unanswered by the officials, which is not acceptable. I have forwarded the Minister some of these questions and he has acknowledged his receipt of them. If we, as parliamentarians, cannot get answers to questions but can read the relevant information in newspapers, something is wrong. How can newspapers get information when we cannot? That issue needs to be addressed because it is not right.

I welcome all the provisions of the Bill, although some could be improved upon. We always want and need more but, by addressing these issues, we will reduce the gap between rich and poor. I welcome the €14 per week for people receiving old-age contributory pensions and for recipients of widow's or widower's contributory pensions or deserted wife's benefits who are over the age of 66. I also welcome the €16 increase in the weekly personal rate of the old age non-contributory pension, blind pension, widow's and widower's non-contributory pension and the one-parent family payment.

I asked the Minister to make the relevant payments directly to the qualified adult on a mandatory basis and I am disappointed he has not done so. To make it optional does not provide for independence for many women. Older women suffer particularly from poverty and that could have been dealt with. I will table an amendment to the Bill on Committee Stage and hope the Minister will be able to take it on board. It arose as an amendment in the Dáil and I am not sure whether the Minister accepted it there. The National Women's Council of Ireland also requested it and sees it as a help to women in that situation.

On the carer's allowance, 150,000 carers will receive the same amount of money —€27 million — as was conceded in a betting tax cut. As we depend on carers, without whom it would cost the State much more to provide the necessary care, that figure should have been greater. While I welcome the increase in the respite grant, for many carers, particularly in Dublin and the eastern region, this would cover only one week of respite care. The budget did not address the shortage of respite beds, which must be tackled if we want to help the carers, a wonderful group of people who must be supported in every way possible. I realise this is not in the Minister's remit.

The family income supplement is important and I welcome the increase. I am concerned that not more people than mentioned will achieve it and that people are not aware of the supplement. We have received information that the take-up is low because people do not have the information. We have spoken on this before. Whatever the Minister can do to tell people the supplement is available is important.

I welcome the one-parent family payment, the carer's allowance, the supplementary welfare allowance and the child benefit changes. It is dreadful to hear, as we did in many of the pre-budget submissions and meetings, of so many children still living in poverty, not having one hot meal a day and not having a new pair of shoes or a warm coat. That is unacceptable. The benefits in this budget should help these families but, as the Minister has said, while a lot has been done there is a lot more to do.