Fidelma Healy Eames (Fine Gael)

I accept there is a key issue between bridging the gap between expenditure and income. Why does Senator Mooney think the Minister for Finance, Deputy Noonan, is spending every waking hour working on the issue, if not for that very reason?

Before we consider the provisions of the Bill, the Fine Gael and Labour programme for Government is dealing with this appalling vista head-on. It has grasped the nettle. However, the challenge for the Government partners is to promote policies that will achieve a more socially just country where the principles I would like to see embodied is what we put in place. The Minister has addressed many of them. First, work is always more valuable than welfare. Second, welfare would not become a lifestyle choice and that the system would not perpetuate that. Third, that the vulnerable must always be protected. Fourth, that education would be seen as a key passport or bridge out of welfare. I would like to see those principles underpinning our work in social protection.

Having regard to the specific provisions, the jobs initiative was announced by the Government on 10 May. It was timely and was produced within a short space of time. As the Minister indicated, provisions for the initiative are contained within the Bill. The expediency of the Government partners in this regard must be congratulated and acknowledged by all sides of the House.

I wish to deal with a few specific provisions. Section 3 is concerned with the PRSI reduction for employers. I welcome that. Employment creation and sustaining existing employment are the key cornerstones of this country's recovery. The impact of the provision in halving the PRSI rate until the end of 2013 for employees earning less than €356 weekly will be immensely effective in creating more flexibility for employers, for example, to open up for longer hours or take on other employees. If one looks, for example, at how that will benefit the tourism sector - the café in Clarinbridge or the co-op in Belmullet which might be a main employer in an area where there is no Intel or Google - that is a fair distributor of wealth. I like the argument that the Minister and Deputy Bruton have made in the past in this regard. The arguments proffered against this provision on Committee Stage in the Dáil held that the Exchequer would suffer from reduced funds being paid by employers and that it would incentivise a race to the bottom. I fundamentally disagree with that because employers are multipliers. Previously, I was an employer of six people, and I definitely saw PRSI as a tax on employment and a disincentive to taking on more people. Therefore, a reduction in PRSI is to be welcomed.

I acknowledge what Senator Mooney said in this regard. Having spoken to employers, I know they do not see this measure as a means to reduce the wages of existing workers but rather as an incentive to take on new ones. Will the Minister be monitoring the impact of this new reduction in PRSI in terms of employment gain and lower costs of services? For example, will we see a cheaper cup of coffee? This would be really useful. The measure will be in place until the end of 2013, and we are now midway through 2011, so it will continue for another two and half years. It would be good if there was an interim review in mid-2012.

Section 16 deals with the national internship scheme, which is a positive development. I welcome the section, which will establish 5,000 new internship positions. I also welcome the fact that the scheme will not displace existing workers, and I am happy to note there is no upper age limit. This scheme will be of major benefit to young people, as unemployment is highest for those under 30. Is 5,000 the maximum number over the term of the Government, or will 5,000 new places be rolled out after the end of each internship period of, for example, nine months? Five thousand is not a high number in light of the high levels of youth unemployment. Has the Minister examined the willingness of employers to offer internship places, bearing in mind the cost and responsibility of taking on interns, including insurance costs? Will multinationals engage in this?

Section 22 deals with the raising of the minimum wage to €8.65 per hour, which I welcome. My colleagues will recall that in the midst of chaos and panic, Fianna Fáil sought to penalise those who were most vulnerable, the lower paid. The current Government promised to reverse this cut and has now delivered on that promise. This reversal will benefit households who are increasingly navigating the poverty line on a daily basis. In some cases, this includes the coping middle classes, who have seen their employment and career prospects gradually reduced over the past number of years. It is another incentive to work - an extra €40 per week is not to be sniffed at. I am also happy to see that this measure will be introduced in seven days' time. Has the Minister established a minimum baseline figure above which it is more valuable to work rather than stay on welfare for various categories of people, including single, married, single with children and married with children? Has the Minister explored the option of a family welfare income cap, a maximum amount of welfare that should go into any house, depending on the category it is in?

I have a real-life case I would like to share with the Minister. A young man with a young family was offered a job with a salary of €40,000 in a midlands town. Despite repeated offers, the young man declined the job offer because, in his own words, it took him so long to get on the dole that he was not going to risk coming off it, and with a young family, he was better off on welfare because of all the attendant benefits such as medical cards, back-to-school allowance, washing machine allowance and so on. All of this needs to be examined. It is through this type of detail that we will work out the difference between promoting a lifestyle of welfare dependency and creating an incentive to work. We must poverty-proof any measures we implement, avoid creating welfare dependency and ensure there is always an incentive to work. This is an exercise in which the Department should engage.

One of the more contentious provisions in the Bill is the extension of the State retirement age to 68 by 2028. I was shocked to learn that we now have six workers for every pensioner and that by 2050 this will be reduced to two workers for every pensioner. Clearly, we had to do something. I welcome this as a reforming move, although I am not looking to work until 68, because I will fall into that category. Does this relate only to the State pension? How will this age increase affect those on public service pensions?

There is one interesting section I would like to discuss, which is the section on profiling. Profiling is being introduced as a deterrent to welfare fraud and as a means of finding the best match for people's needs. This is related to the paying of child benefit for non-resident children, that is, where one member of the family is working in this country but his or her children are in another EU country. It is a controversial measure. We are paying child benefit to such children in other countries at the moment. I understand this is an EU requirement for Ireland, but why can Ireland not pay child benefit to those children in their home countries according to the home country rate and not at Irish rates? We know our financial situation. What is the rationale behind this and can it be reformed so that, for example, we pay child benefit only in respect of children who are attending Irish schools?

There are many other issues I would like to discuss, but I will ask the Minister finally whether she has considered decoupling welfare from other benefits to ensure that people are on welfare only because they need to be and not because it is attractive or a disincentive to work.

I wish the Minister well as she has a big job to do. I am keen that we distinguish between those who will not work and those who cannot work, and I am keen to see that everyone in the State is required to make a contribution. That is what citizenship must be about.