Feargal Quinn (Independent)

I welcome the Minister of State, Deputy Andrews. Today I have been reading the annual competitiveness report from the National Competitiveness Council and it seems this is the big challenge we face. The Taoiseach began the foreword to the publication by stating, "The Irish economy is going through a very challenging period." We went through something like this in 1987 when some very tough decisions had to be taken. The Government has to take such tough decisions in the Social Welfare Bill and I am sure the next Government will have to make the same tough decisions. We got out of it after 1987 because those very tough decisions were taken. We managed to succeed and get back on track. That things have gone wrong in the past three or four years is unfortunate.

It was interesting to hear Senator McDonald speak about getting people back to work and even encouraging them to work without pay. Approximately 18 months or two years ago I met a young woman who was a lawyer and could not find work. She offered to work for nothing and did so to such an extent that after a couple of months of working two or three days a week she could not be done without and was taken on. We have to remind everybody that we can do things ourselves and that we should not rely on the State do everything for us. It is possible to achieve much more. We must ensure we do not make it less attractive to go to work. We must make it attractive to do so.

When the Government has to make a decision and make a number of reductions and cuts, as has happened in this case, let us ensure it takes into account the fact that we have had a reduction in costs. As we have had a reduction in the cost of living, it is possible to make a cut without reducing our full standard. It must be difficult for any Government to state it will make a cut in one section but not another. It must be very difficult to explain to somebody who is blind why he or she must take a cut, while somebody else who is older does not.

The measures include an approximate 4% reduction in most welfare benefits. While this is regrettable, we need to address the social welfare system. When one takes into account the cuts in the public and private sectors, such a cut is not unreasonable, especially as they will return approximately to 2007 levels. We cannot fail to remind ourselves that social welfare payments have increased by 130% in the past 12 years. While the cuts are not easy to make, the cost of living has dropped significantly. We must try and move towards a system in which it will be much more beneficial for somebody to take on work or avail of training opportunities than to stay on social welfare.

I would like the Minister of State to examine the position in Sweden which The Guardian described recently as "the most successful society the world has ever known". In contrast to most of the European Union, Sweden is not suffering from the downturn. In fact, its economy increased by 6.9% in the third quarter after recording a revised 4.5% growth rate in the second quarter. The record level of expansion - the fastest since 1971 - has been much stronger than expected, making the krona swell to a one month high versus the euro. Last month the Swedish finance Ministry stated Sweden's export-driven economy would expand by 4.8% this year and 3.7% in 2011. The Economist stated that, partly because the Swedish Government's reforms had made work pay more and unemployment pay less, the recovery had seen the creation of far more private sector jobs than previous recoveries. If there is one message I would like to see stitched into everything we say today, it is that we much encourage people to get back to work by making it more attractive to work than not to do so. We have to look to moving towards making employment much more attractive financially.

Despite our relatively high social protection levels, the level of homelessness will increase and will be a major problem owing to the downturn if we do not adequately address the problem. The European consensus conference on homelessness took place in Brussels last week. Eoin O'Sullivan, a lecturer at Trinity College, presented research and stated, "There is considerable evidence on homelessness in Europe, but our knowledge remains very uneven for the lack of data and understanding on some aspects of homelessness." We cannot become sceptical about funding homelessness programmes. An interesting precedent has been set by the Kaakinen programme in Finland which began in the 1980s when that country had approximately 20,000 homeless people. The homeless population has since been reduced to 8,000, with 3,000 living without a roof or in emergency shelters. This has led to an annual saving of €14,000 for each person making the transition to permanent housing. I would like the Government to look at this programme and see how a similar one could be implemented here.

Another point I wish to make brings me back to the words used by the Minister, Deputy Ó Cuív, who stated we were looking back to where we were a few years ago. Yesterday I was in Drogheda and as we sat looking out at the volume of traffic on the road, we realised that compared to three, five and certainly ten years ago we were still much better off than we were. Therefore, when we hit a real crisis, as we have this year, we have to take some very tough decisions. A new government will also have to take such tough decisions.

Approximately 18 months ago I raised in House the case of two men who had been both made unemployed, having been earning reasonable incomes. One of them stated his aim was to reduce his golf handicap. The other asked him what he was talking about and he explained he was earning more unemployed than he had been while he was employed. When I brought it up, the then Minister stated this should not happen and that we should never allow it to happen. We must ensure we make it attractive for people to come to work, or at least to attend training programmes. Far too often we have turned a blind eye to the fact that we were discouraging people from working. It is possible to do this as there are many employers willing to take people on, which brings us to an issue on which we will probably touch later. I do not have a problem with the reduction being made in the minimum wage, because our minimum wage is still far higher than the average in Europe, which makes us less competitive. My main concern is that there are many SMEs around the country whose owners would happily take on an extra worker, but cannot take them on at the higher wage. It would cost them too much to employ somebody at an extra €1 an hour for 40 hours a week. There are people who are willing to work at the lower rate: unless the minimum wage is lowered, jobs will not be created for them. One of our objectives with the Social Welfare Bill must be to ensure we make it attractive for people to come to work, and most new jobs will come from SMEs. I would like to mention how things have changed from my experience. Ten years ago, supermarket employees packed people's bags and wheeled their trolleys out to their cars for them. They no longer do this because of the rate of pay of the minimum wage. However, there are people who would be willing to do that, whether teenagers or others, and it is a service that could be encouraged. It could be the first step on the ladder to encourage people back to work.

My real objective with regard to this Bill is to point out that we as a nation must take tough measures. It is easy enough for those of us with jobs and an income to say this, but we must recognise the need to create more jobs and to recognise that these jobs will come through SMEs. These enterprises would be happy to take on more people, but it must be made attractive to them to take them on. My concern is that if we do not take the tough decisions, we will not encourage people to return to work. If we allow a generation that has not had the experience of work to grow up without work, our nation will finish up in and even tougher position than it would otherwise. I find it difficult at any time to stand up and say I support cuts to those who are less well off, but on this occasion we must recognise that we do not have a choice. We have gone through difficulties before and have been able to solve our problems. Let us make sure we do that again this time.