Nicky McFadden (Fine Gael)

I thank the Minister for being here. I, too, welcome the opportunity to discuss MABS.

The most common reasons that people experience difficulties, according to MABS, are changes in life circumstances — illness, unemployment, relationship breakdown, a drop in income and, of course, increased expenditure when there is not enough money to go around.

The Minister outlined the types of people who use the services, but in my experience it is not just people on low income who have difficulties. People who earned a great deal of money are also now affected by serious money problems.

When people have serious financial difficulties it can have significant effects on their health, especially their mental health, and a knock-on effect on the family. MABS provides an excellent tried and trusted service and acts on behalf of the person who is in financial difficulty by making arrangements with banking institutions that are attainable.

A new legislative structure was promised in 2002 for MABS and I ask the Minister to comment on that. The new legislative structure would streamline the organisation while at the same time maintain the valuable local input to which she referred. There would be cost savings in advertising and utility bills, etc.

When preparing for this debate I spoke to my local MABS office, which does incredible work in Athlone. The staff told me that the people who come in to them have nowhere else to turn. Often they come in with piles of unopened letters and bills and place them on the desk in front of the money adviser. I am aware of the excellent rapport that is in existence between the various NGOs and MABS, however MABS alone provides the service of negotiating on behalf of the debtors with the banks.

We must not lose track of the people about whom we are talking. These are unfortunate individuals who have been targeted by the banks. They are victims of sub-prime lenders who have overstretched themselves with serious credit card debt, and who have unsecured debts for car loans, holidays, home improvements, etc. It has been brought to my attention that because these people have got into bad debt, banking services and facilities have been withdrawn from them altogether. That is scandalous.

One of the most positive things people in these lonely and desperate situations can do is recognise the fact that they have a problem and contact MABS. It is a tried and trusted service. If one is on a low income or social welfare payment, a death in the family or a serious illness can cause severe financial insecurity. In fact, people often have to go without food or heat in an effort to pay their bills. Sometimes people who go from welfare to part-time work discover they do not have as much money as they expected to have. They still need to be able to plan how to pay their bills. One of the positive aspects of MABS is that it can help people in such difficulty and find affordable situations and solutions for people who owe money.

The statistics are startling. They show that in the last eight months there has been a 33% increase in the number of people using MABS. Of the total amount of debt, 62% is owed to banks and financial institutions, 17% is owed to credit unions, 3% is owed for gas and ESB and 2% is owed to moneylenders. As the Minister mentioned, the late Séamus Brennan did much to deal with the problem of moneylending. I looked at the website last night and saw the lovely photographs of him which were taken when he launched that campaign. Unfortunately, the increase in unemployment means the statistics relating to MABS will probably increase further.

We must not exclude the self employed from the service. They are also at high risk but MABS is not mandated to help people who are self employed and still trading. They can only get help if their business fails. Perhaps the Minister would review this. It would be most helpful if self employed people could get help when their business is running down. If they got help with book-keeping and so forth, they might find a way for their business to survive.

Lone parents are also getting into financial trouble. If single parents work part-time, they do not qualify for medical cards or the back-to-school allowance. They lose their benefits if they work up to 20 hours per week. These people should be financially better off when they go back to work but they are being penalised for doing so. They then get into huge debt and must resort to the MABS. I met a lady last week whose income is €26 over the limit to qualify for the back-to-school allowance. She has one child doing the leaving certificate and another in first communion class. Both children cost a fortune. She is unable to pay her television licence and went into debt to pay for the books, uniforms and so forth for the children. It is morally wrong. This lady has wanted to work for years but she cannot get out of the poverty trap. She eventually borrowed to pay her television licence.

The people counting the cost of a carton of milk and a bale of briquettes, whom I represent in my constituency, are honest to goodness, ordinary Irish people. They are the most marginalised in society and cannot be subject to budget cuts. I am appalled that the global downturn will be blamed for all our economic troubles. Fuel allowances, pensions and social welfare must be increased to meet the commitments we have agreed under social partnership. If those benefits are not increased, many more people are likely to turn to MABS.

There are plenty of high earners who should bear the brunt of this downturn, particularly the banking CEOs. We found out last week how much they earn. The scaremongering and warning about how difficult this budget will be should stop. It is frightening people to the core. The people who have run this country into the ground should bear the brunt of it.

Combat Poverty recently made a presentation to the social and family affairs committee. That agency should be retained and not subsumed into the Office for Social Inclusion. There will be little monetary saving from subsuming the agency into that office and we would lose a strong, independent voice. The service Combat Poverty provides in terms of research and so forth is second to none. I urge the Minister to review that proposal and not subsume the agency into the Office for Social Inclusion.