Feargal Quinn (Independent)

I thank Senator Bacik for sharing time and I welcome the Minister. I am going to break one of my rules, I am going to read a letter that appeared in the Irish Independent two weeks ago.

Dear Sir,

I recently had a long conversation with a friend of mine who lost his job. He was in a reasonably good job and after a little bit of overtime was earning a gross salary of €35,000 per year.

So I asked him the obvious question of how he was going to cope now with four children to feed and I have to be honest the answer startled me, he was actually a lot better off and now in a position to go out golfing every day when his children are at school.

Frankly I did not believe him until I sat down and did the sums.

On a salary of €35,000 his annual net income after the mini budget was €28,854, after all deductions.

Now he is on the supplementary welfare allowance which, with a wife and four children, gives you €443.90 per week or €23,083 annually.

As he also has a mortgage he is entitled to mortgage interest supplement which pays all the interest on your mortgage so in his case €1,200 per month of his €1,500 mortgage or €14,400 per annum.

He is also entitled to back to school and footwear payment of €905 per year for four children, a medical card which we will say is worth on average say €500 per year (probably more) and a heating supplement which I cannot quantify.

In total he now therefore has tax free income of €38,888, an increase in his net income of €10,034 per year working on his handicap.

Based on the calculations after the mini Budget you would need to earn more than €47,000 per year if you have four children to justify continuing to work. Now this is even before the costs of working like petrol, car maintenance, tolls, lunches etc.

Now in any civilised society and especially a society in a deep recession with a huge welfare bill surely the Government must give people an incentive to go out and work.

Making the child benefit taxable or means for golf tested later this year is just going to make the situation far worse and encourage more people to give up work and rely on the state to live.

It could even drive our small economy to collapse as the welfare bill gets bigger and bigger as more people, including myself, say why should I bother to go out to work when it is basically costing me money to work?

Unless something radically changes I will be joining my mate on the golf course very soon.

The letter is signed by Mr. Andy McNamara, Drogheda, County Louth.

That letter startled me. If we are to get out of the financial crisis we must make Ireland more competitive and find ways to encourage people to work. This may be a freak situation but if it is an example of the current system, we will not become more competitive or correct the economy, we will get deeper into trouble.

I spoke to a number of people in Dundalk who had been made unemployed when a Superquinn shop closed. I asked two of them where they would find work and they replied that they did not know. I mentioned that Newry is only 15 minutes away and there is work there. They said that the would not go to Newry because pay rates there are only a third of those in Dundalk.

We have a problem with the competitiveness of our economy and while we cannot solve it at the stroke of a pen, we will not solve it if we create incentives to stop work and rely on the State so those who are working pay for those who do not work. We must try to get out of the financial crisis and while I am not sure how we go about this, if we are going to succeed we must make some changes, one of which is to ensure there is no incentive to stop working and to rely on the State.

I say this in the knowledge that things were going the other way in other years when I have spoken on this. I did not realise until I read the Irish Independent two weeks ago that such a situation could exist. If it is so, it acts as a disincentive to work and might act to encourage people to give up work to have the State pay for them.