Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I am very pleased to have the opportunity to discuss my Department and priorities for the forthcoming budget and also, in particular, to hear Senators' views on what the budget package should contain.

It is useful in the first instance to outline the scale of the Department's expenditure and its importance for very large sections of the Irish population. An allocation of €19.625 billion has been provided for the Department this year. That represents 38% of gross current Government spending.

Each week, about 1.37 million people, pensioners, people with disabilities, workers on maternity benefit or sick leave, carers and jobseekers receive a payment from the Department of Social Protection. In addition to this, more than 625,000 families receive child benefit each month for almost 1.2 million children.

There can be a misconception that most welfare payments go to the unemployed. This is not so. The single biggest block of expenditure in 2016 will be expenditure on pensions which will amount to almost €7 billion or 36% of overall expenditure by the Department. Expenditure on working age income supports- including jobseeker's allowance, one-parent family payment, maternity and paternity benefit - accounts for €4 billion or about 20% of the overall budget. Expenditure on employment supports,including community employment, back-to-education and enterprise and various employment programmes, amount to €1.1 billion or 6% of the Department's budget. Expenditure provision for illness, disability and carerswill amount to €3.5 billion or 18% of expenditure in 2016. Expenditure on children and families will account for nearly 13% or €2.6 billion, of which €410 million will be spent on the family income supplement paid to low-income, working families. Expenditure on supplementary payments, agencies and miscellaneous services accounts for €867 million or 4% of expenditure. These supplementary payments fall into four main categories: rent supplement; household benefits package; fuel allowance; and free travel. It is worth highlighting that expenditure on pensions and children alone will account for almost €9.6 billion, just under half of the Department's overall expenditure in 2016. The other half goes to adults of working age.

The primary focus of the last Government was to repair the economy and to rescue Ireland from national bankruptcy. As Senators will recall, unemployment reached a crisis peak of more than 15%; CSO data published last week shows that the monthly unemployment rate has fallen to 7.8% with long-term unemployment now under 5%. At the end of June, there were approximately 40,600 fewer people on the live register than the same time last year and 82,900 fewer people than this time two years ago. Employment has increased by 47,000 in the past year and it is particularly welcome that the construction sector has experienced one of the largest rates of increase. The ongoing drop in the live register is freeing up resources we need to meet rising demand for pensions, people with disabilities and carers, among other areas. Whereas it is correct to say that money will be freed up by the fact that more people are going back to work and, therefore, jobseeker's benefits and jobseeker's allowance are falling, the demographic effect of more pensioners, more children, more people with disabilities, more carers every year cancels out any savings that accrue from the fall in the live register.

Budget 2015 was the first budget since the financial crisis in which there was some scope to make improvements in welfare payments. These included rate increases for pensions, child benefit, restoration of the carer's support grant and the fuel allowance, as well as the introduction of a new paternity benefit scheme. I know the House will discuss the legislation for paternity leave and paternity benefit next week. In addition, the Christmas bonus was increased to a 75% bonus in December 2015. As happened in 2014 and 2015, when a bonus was paid, there is currently no provision for a bonus in the Department's allocation for 2016. In 2014 and 2015 the Government was ultimately in a position to proceed with a bonus given the continuing improvement in the State's financial position. However, it is not in the expenditure base for this year. The State's financial position is improving again in 2016 and I will therefore be seeking approval from my Government colleagues in the coming months for the payment of a Christmas bonus once again this year. An announcement will be made on budget day in October. I have spoken to many of my colleagues in Cabinet about it and they are all very supportive so far. If any of my colleagues are opposed to paying the Christmas bonus they have not yet said so.

I have already acted on our recent commitment to increase rent supplement limits. The new measure, in place since 1 July, means that maximum rent limits have increased in every part of Ireland. The extent of the increase reflects the pressures on rental properties in each particular location. For example: there has been a 25% average increase in Laois and Roscommon; a 21% average increase in Leitrim, Cork city, Longford and Galway city; a 29% average increase in Dublin; a 30% average increase in Fingal; a 19% average increase in Westmeath, Kildare and Louth; and a 15% average increase in Cavan and Donegal. This, of course, varies according to household size as do market rents. Looking ahead, the programme for a partnership Government contains a number of commitments regarding social protection. These include increasing pensions and the living alone allowance, protecting free travel for pensioners and people with disabilities, and a rate increase for people with disabilities and carers. The programme also outlines the Government's commitment to the development of a new working family payment to reduce child poverty and make work pay.

I also want to reinforce the contributory principle by strengthening the social insurance system. Essentially, this relates to people paying PRSI and understanding that benefits are linked to what they put in. I intend to restore some of the treatments available under the treatment benefit scheme that were cut by the previous Government during the austerity years. These include dental and optical benefits. I will extend the level of social insurance coverage available to the self-employed. This is a personal priority for me. It will form part of the Government's new deal for the self-employed, which will encompass tax as well as welfare concessions. I know this will be the subject of a separate debate in the House next week and I look forward to speaking on it more detail then.

I am delighted that Report and Final Stages of the Paternity Leave and Benefit Bill are before the Dáil tomorrow. If concluded, the Bill should be debated in the Seanad on Friday under the Minister for Justice and Equality or the Minister of State with responsibility for equality, immigration and integration, Deputy Stanton. I am sure that Members from all sides will welcome this innovation, and, once enacted, my Department can commence the payment of paternity benefit from September to social insurance contributors, including the self-employed and farmers.

I will be hosting a pre-budget forum on Friday week to which I have invited 41 NGOs and advocacy and representative organisations. I am looking forward to that engagement and to hearing their views on what should be prioritised in the budget.

As Members will be aware, there will be about €1 billion of fiscal space available for new initiatives across all Departments in budget 2017. The Government's priority is to build a strong enterprise-based economy that rewards innovation and work, not speculation, and to deliver a fairer society, one in which there is real opportunity but that has a very strong safety net as well. This means that choices will have to be made as to how we can best achieve these goals, and certainly everything cannot be done in one year or one budget. Social protection must compete with other priorities, including health, disability, demands for tax relief and much-need investment in infrastructure. Bearing that in mind, rather than a shopping list that cannot be delivered, I would really welcome a steer from Senators as to what they think should be prioritised in budget talks and what they believe should be prioritised for whatever limited additional resources are available to the Department next year.