Seanad debates
Tuesday, 27 March 2007
Social Welfare and Pensions Bill 2007: Second Stage
9:00 pm
Brendan Ryan (Labour)
Cuirim fáilte roimh an Aire. Tá súil agam go mbainfidh sé taitneamh as an díospóireacht. B'fhéidir go ndéarfaí rud éigin fiúntach, cé go bhfuil sé déanach san oíche.
Among the more embarrassing records of this country is its level of child poverty. We were at the bottom of the table ten or 12 years ago when we were a poor country and we are still at the bottom of the table now that we are a rich country. We have among the highest levels of child poverty in the developed world, which dubious distinction we share with countries such as Greece and the United States of America. The inclusion of those two countries with ourselves shows that child poverty is not connected with the income of a country but with its politics and the way it decides to use its resources. We have decided, to a large extent, to subscribe to the usual nonsense that passes for economics in this country wherein it is believed that to get rich people to work harder we should give them more money but to get poor people to work harder we should give them less. We squeeze poor people's social welfare but dangle a carrot in front of the rich. The evidence from all serious studies is that neither policy works.
The only people who really believe in what are called the laws of economics are economists. An interesting series has just finished on BBC 2 which looked at the enormous damage done to humanity by the blind belief that human beings respond to economic stimuli with pathological irrationality and self-centredness, and only respond to rewards dangled in front of them. The programme concluded last Sunday with the findings of a major study of the concept of homo economicus — the notion that people act in crude economic self-interest — that the only groups to so behave were economists and psychopaths. According to the study, nobody except members of those two groups respond as expected.
However, we will be forced to respond as expected. The major economic textbooks put forward a view of how humanity behaves and state that, should people not behave in that way, society will try to force them do so. The ultimate view on child poverty depends on whether one thinks it is worthwhile. Countries that have addressed the problem properly, such as most of our neighbours in northern Europe, have eliminated or spectacularly reduced child poverty. It is achieved by reducing the number of families in which there are children at risk of poverty. It is easy to achieve but only if society wants to.
Increasing benefits in excess of the cost of living as reflected in the consumer price index is only a token effort. The consumer price index is a global figure but I have not seen a poor people's consumer price index, which is often completely different from the consumer price index for a person such as me. If Members look at the items in the index they will see an MP3 player but not broccoli or other basic food and vegetables. The average affluent family's budget is different from the average poor family's budget so, as the prices of basic items such as energy and waste rise, poor families spend a far greater proportion of their income than the CPI suggests. The increases, therefore, are not generous in the context of the consumer price index for poor families.
This year in Cork alone the local authority raised the charge for a bin tag from €5 to €6. Very poor families are entitled to a waiver but that is a rise of 20% and reminiscent of the sudden increase in excise duty and tax for which the former Minister for Finance, Richie Ryan, was denounced some 30 years ago. Waste and energy prices are shooting up and the failure to consider the costs to families of such necessities is why poverty is still endemic in this country. Instead, we look at a basket of items which people such as I, with a substantial amount of discretionary income, must buy. We then become sanctimonious about the poor, which is why our children live in poverty.
The way the Government has trumpeted its increases in pensions intrigues me. The increases are welcome but the focus has always been on the contributory old-age pension and the people in receipt of that pension have, by definition, been working. Pensioners who have worked for 40 or 50 years will be overwhelmingly male because most married women did not work for significant periods until perhaps 20 years ago. Accordingly, it is a pension which is generous to men and which, effectively, penalises women who, once their spouse dies, will go onto the non-contributory pension, and that has been increased less generously. It is, in fact, an assault on women's standard of living and women, as we all know, are more likely to end up in poverty than men, for a variety of reasons. They have the commitment of children, unlike men, who tend to walk away with considerable ease and too much generosity from the State.
I am glad Senator Norris raised an astonishing aspect of the Bill. Where did the idea come from not to allow rent allowance to be paid in areas of regeneration? I cannot imagine a more extraordinary decision. What is it about? Is it to ensure people who live in such areas do not smell or is it because they might be poor? If I were to wear my malicious hat, which I will probably put on in a minute, I would suggest the refusal to accept people on rental allowance is usually an indicator that a landlord is not up front with the taxman and that the decision is far more to do with taxation than poverty. Landlords do not want tenants on rent allowance because that creates a paper trail. If the Department of Social and Family Affairs and the Revenue Commissioners were serious, every advertisement in every evening newspaper in Cork and Dublin which states "No rent allowance" would invite an immediate investigation. That is not the case, however, because only a small number of landlords have registered for tax and paid stamp duty on the property, as is required if a person is not an owner-occupier, and few have registered with the Private Residential Tenancies Board. We do not know how many people have not registered.
When I see the exclusion of rent allowance tenants from areas of regeneration, I smell a rat. I do not refer to the good and decent people who work in that Department but to the political attitude that we should not make life difficult for the risk takers who invest in property, which is the greatest nonsense ever. It is approximately 25 years since there was a risk involved in investing in property in Ireland. However, people still talk as if those who buy property for rental or other purposes are risk takers. There has not been a risk in investing in property since approximately 1987. It is the most extraordinary attitude.
The Department and the Government are extremely keen on prosecuting people who are found to be abusing social welfare, and I do not have a problem with that. However, they are slow to prosecute people who fiddle their taxes. That is not a reference to income tax but to the people who collect VAT from customers and keep it. That is theft. In the case of income tax, people are at least dealing with their legitimate income but if somebody collects tax or PRSI and does not pass it on, it is theft. These actions do not involve somebody resenting paying over their own money but people holding onto other people's money. The Revenue Commissioners, however, do not prosecute them.
I hope we are not seeing the beginning of a Fianna Fáil scam with social insurance. The country is awash with prophets of doom about a future pensions crisis and the idea that the social insurance fund would be reduced to win an election for Fianna Fáil, which is what this is about, is nothing short of disgraceful. It is as irresponsible as some of the promises that were made in 1977.
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