Sean Barrett (Independent) | Oireachtas source

I welcome the Minister to the House and also welcome the report from Ms Ita Mangan. It is wonderful that we are discussing this today.

I disagree with the principal of universalism and draw attention to page 74 of the report where it records people on a gross salary of ¤250,000 receiving ¤3,360 in child benefit. I cannot think of a less worthy use of ¤3,360 than to give it to somebody who earns a quarter of a million euro. I do not know why that became a principle and it is not for me. I believe that resources should be given to those who need them most.

The Minister is praised, and rightly so, on page 42 of the report as being the most generous dispenser of child benefit of all of the countries studied. When one adds the four payments, the rate in Ireland is ¤360 per month, in Germany it is ¤325, in Canada it is ¤215 and in Italy, to which we are being compared today, the rate is ¤130. In fact, if one looks at the OECD-IMF statistics, one sees that we have a social benefits to GDP ratio of 21.9% compared with an OECD average of 17%. There is a lot of money in here. We must, with income redistribution, have one set of people who pay in and another set who take out. We cannot have a system where everybody is a beneficiary and nobody wants to pay in. That is the basic flaw in universalism.

The second area where the report's authors erred is on the question of the taxation of social welfare. Social welfare is money. It buys things and I cannot see why one would tax work harder than one would tax welfare. In fact, on page 29, the report says that some members of the advisory group considered that the taxation of child benefit remains "an attractive option". The report also notes that "the degree of matching of DSP data from the child benefit file with Revenue data on households (in the order of 87%) indicates that the taxation of child benefit might be less technically difficult than previously thought". We can get the two systems to talk to each other, according to page 29 of the report, which claims that we are 87% of the way there.

The other concern I have is the way the report treats family income supplement. It is quite worrying to read that two thirds of people on family income supplement would be worse off under the two-tier system. That would be a regressive step. I am also worried about the point raised on page 36 regarding the dislike of the family income supplement system among voluntary organisations. It is money that is paid to low-income workers and that is what we are trying to encourage.

When the Minister was last in the House, she referred to the building up during the Celtic tiger boom of a permanent underclass based on doubling the number of people in receipt of disability and invalidity payments. Is the reason for our child benefit payments seemingly having less impact the idea that it is being paid to people who are not working? The Minister was critical of our development during the boom. Mr. Dan O'Brien wrote strongly on the matter in The Irish Timesrecently. We have not addressed the question of why this was allowed to happen in a booming economy or why we have twice as many people in receipt of invalidity and disability payments as any other EU country, something that has led to there being households in which no one works.

I am concerned by the report's attitude to the family income supplement, FIS. As outlined on page 28, two thirds of parents in receipt of FIS would lose between ¤1 and ¤100. Less than 20% would gain ¤1 to ¤50. I do not see the point in proceeding with that type of system. Why are advocates, whose sincerity in tackling poverty I accept, so critical in their submissions, which have a go at the FIS?

We can integrate the two computers. We are 87% of the way there. We must tackle the disability-invalidity sector, which has grown rapidly and is producing households in which no one works, as the Minister mentioned.

On page 46, the report states that 19.5% of children live in taxpayer units with incomes of less than ¤20,000 and 80% live in units of less than ¤80,000. These figures should be more modulated. If we are aiming for a redistributional system, a large gap of 300% is too much.

The report contains many ideas, but I will not infringe on the Cathaoirleach's patience. I thank the Minister for laying the report before the House. I am sure that this is the start of a most interesting debate. My compliments to Ms Ita Mangan, her team, the Minister and her officials on holding this discussion.