Frances Fitzgerald (Fine Gael)

A number of questions must be asked of any budget. Was the budget fair? Did it deal with competitiveness issues? Was there a job stimulus? Did it protect vulnerable and families? Did it protect children? That is surely one of the first goals of any budget. When we examine this budget and all of these criteria, we must, unfortunately, conclude that the budget was not fair, did not provide a strong enough job stimulus, did not deal with the competitiveness issues so critical to taking people off the dole queues and did not protect the vulnerable and families. I agree with previous speakers who said it dealt a blow to social solidarity and social justice in this country.

The Government got a lot of cover from the political parties and the social partners in respect of the scale of the cuts that were necessary. However, there were choices to be made within that agreement to make cuts of €4 billion. Senator Brady asked whether people were suggesting alternatives. Other parties were suggesting alternatives, even though they accepted the need for the size of the adjustment in the public finances. We in Fine Gael were saying that within that adjustment choices could be made. We can make choices about protecting child benefit, families and those who earn less than €30,000, yet we can still meet the overall borrowing requirement and adjustment necessary to get the country's finances back on track.

I would like to make a point about child benefit and how we support families with benefits. The practice of means testing as many benefits and payments as possible makes Ireland an exception in the European Union. According to the National Economic and Social Council, Ireland means tests approximately 25% of benefits and benefits in kind as a proportion of social protection expenditure. Data from EUROSTAT indicate that this is the highest proportion among 14 European Union countries. For example, the United Kingdom only means tests 15% of its benefits, while in Austria and Italy, the figures are 5% and 4%, respectively. Ireland is, therefore, exceptional in Europe in terms of the proportion of benefits subject to a means test. Other countries, for example, the Nordic countries, find a universalist approach more consistent with their values or more effective in delivering benefits. This is an important point on which I ask the Minister to comment.

The Minister chose not to means test child benefit. The assumption in the means test is that the benefit will meet its targets and reach its intended recipients precisely. In truth, however, this assumption is rarely met because in means testing there is constant leakage away from the target group and individuals are thrown onto temporary payments such as supplementary welfare allowance.

A second aspect of the debate on child benefit has been the question about whether the payment has increased significantly in value during the years. Increases in child benefit were partially funded by not increasing other child payments such as weekly child dependant allowances paid to social welfare recipients. As I am sure the Minister will agree, the focus of all child income policies switched to child benefit in recent years. The benefit was also regarded as a means of paying for child care.

I note the Minister acknowledged the role of child benefit when she stated:

Some families rely on it to buy basics such as food and clothes. For many women, it makes it possible for them to work outside the home by helping with child care costs. Even for women in high income families, it may be the only money paid directly to them.

A number of speakers asked whether universal child benefit was a waste of money in an economic downturn. While this is an important question, we have for a long time recognised the value of universal systems and acknowledged that certain benefits are required for the public good and solidarity between groups. For example, social insurance contributions are obligatory, all children are vaccinated, education for all primary and second level pupils is free, all pregnant women are entitled to a minimum of services and insured workers are entitled to sickness payments, regardless of income. There was a choice to be made on whether to attack child benefit in the budget and the Government chose to attack it rather than avail of the alternatives. Child benefit is a critical payment for children, families, women and men who want to work outside the home. I regret the Government chose to cut the payment as it will affect families throughout the county.

Some of the arrangements, including top-up payments, being introduced to protect low income families create a new poverty trap. Poverty traps are a widely recognised problem and the reason the Government in recent years focused on child benefit rather than other allowances is that it recognised that focusing on other allowances would create a poverty trap. The reduction in child benefit is a policy reversal. Creating a poverty trap is the last thing we should be doing at this point.

On protecting the vulnerable, the choice available to the Government was whether to take €8 a week from recipients of a range of social welfare benefits or, as proposed by the Fine Gael Party, protect those in receipt of allowances. The Minister opted for the former approach. My party would have protected carers and recipients of the blind person's pension because these groups are finding it difficult to survive in the current circumstances. This was not the time to make such cutbacks. Instead, the Minister could have taken action in the area of rent supplement by moving recipients of the benefit to the rental accommodation scheme. Will she examine this matter? Rather than cutting social welfare payments, she could have undertaken a comprehensive reform of the rent supplement which costs large sums of money.

The budget did not protect families, the vulnerable or recipients of social welfare payments. The option of protecting these groups was available to the Government. In choosing not to do so it has dealt a heavy blow to social solidarity.