Lisa McDonald (Fianna Fail)

I welcome the opportunity to speak on the Bill. It is not easy to discuss cuts that must be introduced through financial necessity, especially given that some of the increases were only introduced two years earlier. Having said that, I congratulate the Minister on the way she has balanced the portfolio in a fair way. When one considers there are 400,000 on the live register, 1.1 million children in receipt of child benefit and 470,000 senior citizens in receipt of the State pension, to divide it up in a fair way is not easy, but she has done a remarkable job.

The social welfare budget of €21.1 billion for 2010 compares to a figure of €20.4 in 2009. This is a huge budget, two thirds of the entire tax take for last year and probably the same for next year. It represents 35% of the entire Government spend. It is not easy, therefore, for any Minister to bring forward a balanced portfolio of cuts. We must recognise that the overall position of the public finances demands that we take action because if we do not, we will be in the unfortunate situation where others may do it for us. The priority of the budget and the Government is first and foremost to stabilise the public finances. Anyone who ignores this fact is not living in the real world. We are aware from discussions throughout the year with those such as the ECB and the IMF that they expect us to take this corrective action or they will do it for us.

We must remember that it is important to strike a balance between low earning workers and those on the dole to ensure there is an incentive to work. We are dangerously close to that position. Someone on social welfare said to me today that he was actively looking for a job but that he needed to reach a certain level because if he did not receive €20,000 at least, it would not be worth his while to come off the dole. That is a nightmare problem to sort out but we must move now. Some of the amendments the Minister has made since taking office point in that direction, another reason to commend her.

Leaving the pension unchanged was important. It is important that those who built Ireland through their blood, sweat and tears, as well as their taxes, are protected. As a society, we should recognise that they deserve special treatment for what they have done for the country. They have always recognised the benefit of their free television licence, bus pass, fuel allowance, telephone allowance and ESB and gas allowances. These are very important and I have no doubt from the discussions I have had with senior citizens that they are delighted they have not been touched.

The fact the half-rate carer's allowance scheme is staying in place must also be welcomed. As Senator Butler said, when we are position to do it, there are commitments to try to improve the lot of carers, with widows and lone parents. It is important that lone parents and those with a disability participating in a community employment scheme will retain their benefits. The domiciliary care allowance paid to parents and guardians of severely disabled or ill children under 16 years has also been retained and amounts to more than €1,700 a year. The Minister also highlighted the increase in home care packages.

There was a great deal of lobbying by family resource centres which play a vital role. The counselling and mediation services they provide are fantastic. Maintaining them has been a challenge, but we met that challenge. I am sure the 170 bodies throughout the country welcome this measure. The people involved do great work.

The social welfare budget, at €21.1 billion, accounts two thirds of Government spending. Some have suggested there should not have been any cuts. Fine Gael, however, called for a cut of 3% cut. Therefore, the Opposition parties are not resonating with each other. Deriding the Government for making a cut of 4.1% while at the same time calling for a cut of 3% does not make sense. While castigating the Minister for changing benefits, Fine Gael recognises there had to be serious financial retraction. Considering the choices the Minister could have made, she has acted in a balanced way.

Parents will not welcome a €16 reduction in child benefit, but Senators should recognise the value of this benefit has increased by over 300% in ten years. When we consider that for the past year there has been deflation of 7%, the purchasing power of that payment has increased. To suggest the cut was not reasonable is unreasonable. Through increases in family income support and the qualified child payment, those at the lower end of the income bracket will not be affected by the cut. It is very important that they are not affected by this cut. This has not been highlighted and some people are a little confused. In my view the receipt of child benefit by those with high incomes is wrong. This benefit should be means-tested or taxed. It is like a business person borrowing from his or her self in order to gain an increase in salary and this is not a sensible option. It will need to come to a stage where child benefit will be means-tested or taxed. This may be a difficult process in terms of logistics but we must consider these options in the future and move to that position.

In terms of the country as a whole, the programme before us is balanced, reasonable and probably progressive. With regard to jobseeker's allowance I commend the Minister for making people under 24 go on educational and training courses. I have heard many of my constituents commenting on this issue over the years. Quite a number of young people never seem to do anything further in order to educate themselves and they are not interested. Their first action on becoming 18 is to go down to the dole office with their father. This is a mindset and a culture which must be changed. The Minister's proposal will incentivise young people to upskill for their own good especially if they realise they will be financially disadvantaged otherwise. We cannot ignore the fact that this proposal may become an issue to be dealt with. We should not leave people sitting at home doing nothing. There must be an incentive for young people to upskill themselves otherwise they may continue drawing the dole for their whole lifetime. We need to consider the broader issue of young people on the dole, such as young women who have had children out of wedlock and those aged 23 or 24 who return to education. There are issues to do with living independently away from the family home, leaving home when a child is born or living independently when applying for back to education grants as mature students. This proposal is disincentivising people and creating a poverty trap. It would be preferable to allow young people stay at home rather than applying for a rent allowance or applying for a council house for themselves. It would be an improvement in their quality of life if they could stay at home and give younger women in particular a chance to return to education as they would have family support.

I recently met two young girls who are aged 18 or 19 and who have both had a child. They are not moving out of the family home and they are being supported by their parents. This is a new culture which is to be welcomed. I suggest the social welfare system should encourage and support this arrangement but this is not the case at present and it should be changed.

I question the statistics for social welfare fraud in the report of the Comptroller and Auditor General. In my view these statistics do not correspond with what is known in society generally. I refer to illness benefit and the fact that doctors are in a position to say that a person is suffering from depression. This may need to be examined as it is all to easy to say that a person is depressed and if a person is depressed he or she needs to be treated by a specialist rather than by a GP.

I commend the Minister for the employer PRSI incentive which allows employers to take on a person who has been unemployed for six months and this is a welcome measure. It is good for the person who is employed and it is good for business in these hard times and it will help sustain that person by allowing him or her to upskill in difficult times. We need to do something for the self-employed as they do not have social welfare entitlements if they did not pay for stamps. We need to look at the employer's subsidy scheme and apply it to small businesses. We need to help business by making it easier to employ people. The creation of employment is the big challenge and to ensure that people are not better off on the dole than in lower paid work. We need to retain the culture of work. I commend the Bill as it is a start. It has been very difficult for the Minister in her efforts to make these cuts but they have been carried out in a fair and balanced manner.