Fidelma Healy Eames (Fine Gael) | Oireachtas source

The Minister is very welcome. The purpose of this debate is to discuss items in advance of the budget that might inform the Minister's decision making and it is on that basis I propose to deal with it. I will cover a broad range of issues.

I welcome the Minister's decisions on CE schemes; I say "Yes" to these schemes and their continuation. I have seen the richness they provide. I say "Yes" to the carer's allowance arrangements; there are no cuts to it or to the CE schemes. I say "Yes" to the measures for pensioners and the free travel scheme. These are all very strong social measures and give a great deal of dignity to the people who benefit thereby. All these groups are vulnerable.

The genesis of the welfare state was based on a system of rights and responsibilities in equal part. It is a social contract between the citizen and the State. As the Minister has often observed, it is a hand up rather than a hand out. I am not sure this is fully understood any more. In the fullness of time, when the Minister is doing information campaigns, it might be useful if the nature of the welfare state were explained to the public. She might consider that for the long run.

One of our problems is that welfare is being used to service debt. According to the Central Bank, there are 130,000 mortgages in arrears, of which 83,000 are private residential mortgages that have been in arrears for at least three months. Some 5,600 mortgages have gone into arrears in the past five months. We have a deepening mortgage crisis in Ireland, with 70% of household debt being mortgage debt. This is where the problem lies. As I see it, the anomaly in our social welfare system is that payments such as FIS, jobseeker's allowance and benefit - not just mortgage income supplement - are being used to service mortgage debt. This is due to the economic imbalance caused by the property bust and the recession. It causes a cyclical problem whereby the State increases its own debt to pay out social welfare that is being used to service private debt. It is creating a welfare system that is under an enormous burden and is not really a properly functioning system.

This is an issue for the Minister. The Personal Insolvency Bill which is to be debated in this House is understood to give too much clout to the banks. I read in the article by Kathy Sheridan in The Irish Times that the Minister stated the banks must help middle-income families who, by and large, are crippled with mortgage debt. The Minister is at the Cabinet table. How can she influence this issue in such a way that we can have a functioning banking system that will be fair to the citizens? Let us not have a veto given to banks in the Personal Insolvency Bill.

Senator Mooney described austerity as a problem - of course it is. Yet we all know why we need austerity. We must grasp every measure that will provide for and give us growth. I attended an EU meeting last weekend where I learned that if we implemented the EU services directive our country would gain 2.4% in GDP growth. I will make the same point to the Minister for Jobs, Enterprise and Innovation, Deputy Bruton. We need to look at such measures in order to counteract the very bad news in terms of austerity and necessary cuts.

As the previous speaker remarked, nobody wants to attack the poor and vulnerable. If it were only that easy. When the opposite side was in government it had to take ¤5 from blind people. I am sure it did not want to do that.

Will the Minister address my question? How will her functioning system address the fact that welfare is being used to service banking debt? Why is there no family income upper limit for welfare in order to maintain the work incentive? Rather than means-test, surely there is a way of finding that if there are two parents and one child in a family a certain figure is the maximum welfare that can be earned, while if there is one parent with three children there is a different maximum welfare figure. That families are living entirely on welfare without incentives to work shows a flaw in the system. In the social protection committee we have learned that this applies to some 4% of families in the country, in particular families with three or four children. How is this being addressed? Children grow up in these families. We do not want anybody to get a bad lesson from the welfare system. If 4% of families have a problem let us address it.

Are the various allowances such as those for rent and fuel and jobseeker's allowance being taken into account together when they are being calculated or approved? Is there a reason the aggregate cannot form a method of arriving at an upper limit for welfare? I have put that question before to the Minister and would like to hear the answer.

My next point comes as a result of walkabouts with feedback coming from constituents. Why are people not asked to work for their welfare? It would be purposeful and meaningful work, the people concerned would be out and about and their contribution would be visible. Now that local councils and agencies are short-staffed and in need there could be a real benefit. Fr. Sean Healy has put this concept to us before. Taking into consideration the post a person had before falling out of employment, for example, an architect on ¤20 per hour, that person could work at that rate per hour to contribute a number of hours for his or her welfare. If he or she was receiving ¤20 per hour before and is now receiving ¤180 per week in welfare he or she would work nine hours. Has the Minister given any thought to that system? I am sure Fr. Sean Healy has presented it to her. I see a lot of merit there. Fr. Healy costed that scheme at approximately ¤150 million because it would create extra work to run. In addition, there would be a small reward of approximately ¤20 to ¤30 per week.

There is a debate around child benefit on whether to cut or not to cut. I believe there is good support for the Minister's proposed two-tier system. I did a walkabout in a middle-class estate. Let us not forget these are the people who are paying all the charges and facing property tax next year.

The average age of children on the estate is under five years. I spoke to 21 families, all of whom stated it would be fair to cut child benefit by ¤40 per month, provided the savings were put to good use. I was astonished by this response, especially as these are the people who will pay the property tax next year. They would love the ¤40 reduction in child benefit to be put towards their property tax. This would be a reasonable solution, given that ¤40 per month adds up to ¤480 in a year and a property tax bill of ¤500 would be significant. Psychologically, people do not mind if money taken from one area is used to ensure they do not have to pay another new bill. There is a generosity of spirit abroad and people trust that we are doing the right thing.

Child benefit is a universal tax-free payment made to all families. Since when did people come into the world equal? When did incomes become equal? Universal payments amount to unequal treatment. The key issue is deciding where would be the dividing line between those who would lose ¤40 per month and those who would keep it. We must bear in mind the squeezed middle and the wife of a Garda sergeant whose letter was cited in The Irish Timesyesterday. It is becoming abundantly obvious that the new poor are those in the middle class who do not receive social welfare payments. We must set a figure for how much disposable income families should be left with after paying for essential outgoings. Is the Minister working on this figure? Has she worked out what can reasonably considered essential outgoings?

The jobseeker's casual working payment should be calculated by the hour rather than whole days. The Minister will have heard this argument at a meeting last Friday. Is she open to the suggestion such a move would facilitate greater part-time employment? I am very concerned about the level of youth unemployment and I have examined the position in countries such as Norway, Sweden, the Netherlands and Denmark. All of these countries use this type of system as it allows for greater flexibility among jobseekers. Youth unemployment stands at 8.5% in the Netherlands, 14.3% in Denmark and 30% in Ireland. Under the arrangement I propose, jobseekers would not be unavailable for full days and would be able to do more part-time work. This system reduces the disincentive to work on certain days which is created by the current social welfare rules.

The self-employed should have an option to contribute to the social insurance fund to address the possibility that their business will fold. The Joint Committee on Education and Social Protection heard a good presentation on this issue. Is the Minister open to this proposal which would provide a much needed safety net for the self-employed? Self-employed persons should be given this option, even if it is costly.

The Minister must not implement the proposal to have employers pay the cost of the first four weeks of sick leave for employees as to do so would force businesses out of this jurisdiction. We have listened to the views of representatives of ISME, the Small Firms Association and IBEC on this matter. Employers have informed me they will source employees in the North.