Sean Barrett (Independent) | Oireachtas source

The Minister for Social Protection, Deputy Burton, referred to social welfare appeals service through a human rights lens. There is another lens, the economic one. Over 80% of public expenditure comes from health, education and welfare. We have an impossible borrowing situation which bankers and others account for too, I accept. However, we cannot solve this problem by the nomenclature of entitlements because for every entitlement, someone else must pay. We have given away so many entitlements that we have exhausted the taxable and borrowing capacity of the country. Now we are in bankruptcy ourselves.

The Minister referred to the social welfare appeals procedure costing ¤47 million. Last year, the National Advocacy Service received ¤2.6 million in funding while the Irish National Organisation for the Unemployed and the Northside Community Law Centre both received nearly ¤1 million between them. The Irish Congress of Trade Unions receives ¤5.75 million per year. There are 34,000 appeals cases against 320 in Northern Ireland. We have made a nightmare industry out of this which needs to be tackled. Society must be divided into those who pay in, those who neither pay in nor receive and those who are to be recipients. What the Minister is trying to do is ration but we cannot give everyone everything they want. That is what has the country bankrupt. It is not a unique problem in Ireland as there are many other countries whose debt-to-gross domestic product is heading towards 120%.

I recently read Vito Tanzi?s book, Government versus Markets: The Changing Economic Role of the State who argues that is what has got us all into trouble. He argues we have made this culture of entitlement but it cannot apply to everyone, stating:

With the passing of the years, this additional public spending was increasingly connected with programmes that, once passed, made that spending difficult to reverse. This created strong political constituencies and expectations that transformed the benefits from the spending into ?entitlements? or legal claims against society. [The legal claims are greater than the ability of this society to afford them.] As a consequence of this spending, public budgets become larger, less flexible and less discretionary, tying the hands of future governments. In today?s world, the truly discretionary part of yearly budgets of most countries is often very small ? When new programs are introduced, the pressures on governments to spend more will always be present, especially when attitudes towards larger government role become more favourable. In these circumstances there is no longer a specific identifiable limit to the spending role of the state. The requests for higher spending can continue ad infinitum as long as there is a political response to them.

That is what we face in this country. Tax and social welfare should be integrated, while tax shelters should be eliminated. Earlier today, we discussed how bankers were allowed to take ¤64 billion out of the Exchequer on one particular night in September 2008 and how a German bank located in Ireland cost the German taxpayer ¤100 billion to rescue. There are far too many claimants and one has to allocate the resources towards those with low incomes as best we can.

Our payments are not low by European standards. The Minister for Social Protection has told me before that Scandinavian states impose stricter conditions on social welfare payments than we do but everyone asks for us to go for the Scandinavian model. We cannot sustain existing social welfare payments. The Minister is making an honest attempt to ration resources towards those who most need them. I disagree with her on child benefit. Paying it to everyone preserved the mythology that we all have an entitlement. The Exchequer cannot continue like this. An important part of the pre-budget debate is that we identify the priorities in social welfare payments and how can we allocate them without the significant transaction costs we heard this evening. That Northern Ireland seems to be able to do it without less appeals and less money may be worth examining.