Seanad debates
Wednesday, 19 November 2003
Estimates for 2004: Motion.
10:30 am
Michael McCarthy (Labour)
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I move:
That Seanad Éireann, noting that as a consequence of the Estimates for 2004
–Back to Education Allowance is all but abolished at third level
–Conditions for the Rent Supplement are to be severely curtailed and restricted
–Crèche supplement for childcare will be discontinued
–Earnings threshold for Disability and Unemployment Benefit will go up and
–Duration for Unemployment Benefit payments will be reduced,
condemns this assault on the living standards and educational opportunities of the most disadvantaged in our society.
I welcome the Minister for Social and Family Affairs, Deputy Coughlan, to the House. The Book of Estimates characterises an ugly prevalence in terms of governance here since last year. I believe strongly, as many people do, not least the organisations which represent the worst off in society, that the Book of Estimates, as presented by the Government, demonstrates disregard for those who are less well off in our society. This highlights what is becoming a well believed statement, that if one does not belong to the golden circle or if one is not part of the K Club or part of the circle of those who live around it, one is not even worthy of merit in the form of support from this Administration.
When the spate of public sector cutbacks was initiated, it was predicted that their impact would be remarkably negative on those who are less well off. It is those people who will suffer at the hands of the apostles of fiscal rectitude. We do not need to name the main apostle in terms of that category but he is ably supported, unfortunately, by many more around the Cabinet table. The person who was Minister for Social Welfare in 1992 introduced a number of cuts that were called the dirty dozen, which lived up to their name. However, just as we have witnessed massive advances in technology and in many other areas in western society in recent years, we have also witnessed, unfortunately, a bigger, more cruel type of monster emerging from the shadows of the dirty dozen. We can christen that monster, the "savage 16" because what we saw last week was nothing short of barbaric and savage.
I will go through the savage 16 cuts. Social welfare recipients must be on welfare for 15 months rather than six months to qualify for the back to education allowance at third level. Lone parents will be refused the transitional half rate social welfare payment to ease the break from welfare when they take up employment and earn in excess of €293 per week. Recipients of supplementary welfare allowance or rent or mortgage supplement must pay at least €13 instead €12 towards their accommodation before qualifying for these allowances. Supplementary welfare allowance will not be paid any longer to a household where one member is in full employment. If one of a couple is working, both will be excluded from rent allowance or mortgage supplement.
Health boards can now refuse rent supplement to someone who is not already renting for six months unless that person is homeless or where there are other compelling reasons. Rent allowance claimants will be referred to the local authority for assessment of housing need in a more systematic manner rather than applying to the Department of Social and Family Affairs. Having regard to these cuts, it is appropriate that when that Department was renamed, the word "community" was removed. Rent allowance will no longer be paid to people who refuse an offer of a local authority house or who leave such housing without reasonable cause. A supplement given to recipients of supplementary welfare allowance who have been supported by the Money Advice and Budgeting Service in brokering a deal with creditors it to be discontinued.
The crèche supplement which assists in covering the cost of emergency child care is to be abolished. The diet supplement, which is paid to people with special dietary needs, such as coeliacs, is to be phased out over a number of years. The entitlement to the half rate child dependant allowance in respect of unemployment benefit and disability benefit claims will be discontinued where the claimant's spouse or partner has a gross weekly income in excess of €300. The current weekly earnings permitted to claim the reduced rates of disability and unemployment benefit has been increased from €88.80 to €150. The entitlement of new claimants to the half rate payment of disability and unemployment benefit where the recipient is already in receipt of widow's or widower's pension or the one parent family payment will be discontinued. The maximum duration of unemployment benefit will be reduced from 390 days to 312 days where a person has less than 260 PRSI contributions paid since first entering employment. The number of paid PRSI contributions required for qualification for disability, unemployment and health and safety benefit has been increased from 39 since first entering insurance to 52. The 16th cut is an increase in the period where claims for unemployment benefit and disability benefit are linked to a previous claim from 13 to 26 weeks.
I have great difficulty with the language used to justify some of these measures, particularly the term "disincentive to employment". No one decides to give up a job. People lose their jobs when their place of work shuts down. Given the way the economy is going, people have no choice if they are out of work. There is no disincentive to employment. It is unfortunate and regrettable, but one cannot blame those who have lost their jobs.
Margaret Cox (Fianna Fail)
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Was that in the Labour Party's general election manifesto?
Maurice Cummins (Fine Gael)
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We are not listening to the Fianna Fáil manifesto.
Michael McCarthy (Labour)
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A 2% increase in the capital gains tax would negate the need for such a cutback. The current weekly earning threshold for the purpose of payment of reduced rates of disability is being increased from €88.88 to €150. The threshold has not been updated since 1993. This represents a serious disincentive to employment.
Part-time workers who lose employment or take sick leave get half-rate unemployment or disability benefit, respectively. Deciding whether someone is full-time or part-time depends on average weekly earnings in the previous tax year. The current threshold between full and part-time is drawn at an average earning of €88 per week. This is set to rise to €150 per week. Up to now someone whose average income in the last tax year was, say, €130 per week, was entitled to full rate unemployment benefit when they lost their job or full rate disability benefit when they were sick. They will now be only entitled to half the benefit rate, at €62.40 per week.
A major consequence of the Estimates will be to drive more lone parents and their families into poverty. Recent research from the ESRI shows that homemakers and lone parents are the largest single group living in poverty. A plethora of reports, many of them Government ones, argue that the best route out of poverty is through acquiring skills and getting work. However, in a short-term saving of money, a massive roadblock has been placed across the escape routes available to these families, with the result that their long-term welfare reliance is reinforced. These cuts will lead to a growth in child poverty as they prevent people from having a better quality of life.
During last year's general election, the daily press contained launches by various Ministers of their programmes. Candidates threw themselves at Ministers as they announced measures to copperfasten economic growth in many areas. However, the shelf life of the manifestos of the Government parties was as short as the length of time it took for the Dáil to sit after the general election. Their promises and commitments have been broken one by one. The general election of May 2002 was bought and the people were fooled and conned.
The contemptuous arrogance of the Government since then has been remarkable. There is documentary proof from the Department of Finance that the manifestos amounted to nothing more than a tissue of lies. Given the cutbacks in the public sector and the savage 16 cuts announced in the Book of Estimates, we do not need lectures by the Government, yet despite this, it has embarked on a sustained campaign to tell people that its record is not as I have outlined.
The Government will only be serious about fulfilling its commitments and promises in the general election manifestos when it reaches the last month of its five year term of office. By then, our friend from County Kildare, the Minister for Finance, Deputy McCreevy, will have bankrupted the country. There will be job losses and hospitals will be ready to close down. God knows what will happen.
Collective Cabinet responsibility has been thrown out the window. When attempts are made to rectify it with a half-baked apology and a commitment made by the Taoiseach to howls of laughter in the Lower House, another Senator and Deputy pour cold water on the Hanly report. The Minister for Finance, Deputy McCreevy, decided that his pastime and hobbyhorse at Punchestown was worthy of €15 million of taxpayers' money. While the two Ministers concerned are well known visitors—
Mary Coughlan (Donegal South West, Fianna Fail)
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The Deputy better not refer to other places.
Margaret Cox (Fianna Fail)
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A Chathaoirligh, is the Punchestown Event Centre relevant to the debate?
Michael McCarthy (Labour)
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—to places of entertainment such as racetracks, as they are entitled, they are not entitled to squander €15 million of taxpayers' money. Nor are they entitled to breach clear Cabinet guidelines and procedures on how they expend money. It typifies the arrogance and contemptuous attitude of the Government.
We are now worse off than we have ever been. We have an arch-conservative Government which is content to operate within a golden circle. Those not in its remit are on the margins. The rule is, if one is not in the golden circle one is not worthy of merit. That will be the lasting legacy of the Government.
I look forward to next year when the people get their first opportunity to cast judgment on these savage 16 cutbacks. The Taoiseach and Minister for Finance and those who are party to administering a secret manifesto involving the shut down of public services and the bankrupting of the country have the arrogance to tell us that what we heard last year was not what we were told. The Minister for Finance said then that no cutbacks were planned, secretly or otherwise. I ask the Minister for Social and Family Affairs, Deputy Coughlan, to tell the House where in the manifestos were these savage 16 cutbacks mentioned. Where did they indicate that, within a short period after the general elections, there would be cutbacks in allowances on which people depended, such as the back to education allowance, the lone parents allowance and rent supplements?
Kathleen O'Meara (Labour)
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I second the motion. If anything has demonstrated the philosophy of the Government, it is the Book of Estimates published last week. It demonstrates that the Progressive Democrats' agenda is running the Government and that it has lost touch with the people it claims to represent. This is particularly apt when the Fianna Fáil Party always claims to be the party of the people. It also demonstrates that the Government has a total disregard for the poor and vulnerable in society.
I thank the Minister for being open and honest about its stance. The philosophy is that people should not be poor, unemployed, a single parent or in need of housing. The clear philosophy of the Government is that these people are not to be supported; they are on their own and the Government is not there for them. This is not the philosophy of the wider community, which is why people will see this for what it is. People have been very taken aback by these Estimates and the savagery towards people who are vulnerable in our community. The attitude underlying these Estimates demonstrating the current philosophy of the Fianna Fáil Party and the Progressive Democrats led Government is: "You are on your own and we do not care about you."
In her press release and on the radio last week, the Minister spoke at length about how the social welfare system now represents such a disincentive to employment. In other words the IBEC agenda is clearly running the Government. This is the agenda which states social welfare supports are somehow preventing people from working, as if people would choose to be on social welfare rather than be at work.
The Minister should come down to the midlands where for the past six years there has been a haemorrhage of jobs, which have not been replaced, and talk to people about a disincentive to employment. She should talk to those who lost their jobs recently following the closure of the Tubex plant outside Nenagh. Very few of these people have managed to get another job despite their best efforts because there are no jobs. The Government is claiming it is not its fault but the fault of those people.
In the past our social welfare philosophy has recognised that some people need a cushion and need to be supported. I may be wrong, but I still believe we live in a country where we want to support people who need support, such as single parents and those with disabilities. However, the philosophy behind these cuts is quite the opposite.
Mary Coughlan (Donegal South West, Fianna Fail)
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It was last Saturday.
Kathleen O'Meara (Labour)
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—and listened to people who need supplementary welfare allowance. The people whom I meet and who need supplementary welfare allowance are very vulnerable. They are not people who are ripping off the system. They do not want to ask for it but are in need of support. Clearly the Minister and her Government colleagues do not see it this way.
The notion that if one partner in a couple is in full-time employment both are excluded from claiming rent or mortgage supplement suggests that one income is enough to support a household. However, the Minister should consider some of the low incomes people are now earning. Even in the public service people are earning very low incomes and are expected to live in an increasingly expensive society made more expensive by the stealth taxes that are being piled on every day to such an extent that the Society of St. Vincent de Paul says its new clients are finding it increasingly difficult to keep body and soul together despite being earners.
The people I meet who are on rent supplement need that supplement. I meet many single parents in particular who find themselves caught by the fact that if they work they cannot claim rent allowance, but if they give up rent allowance they cannot survive and cannot pay rent. When this is viewed against the background of a mounting housing crisis, it is possible to see the full extent of the savagery of this cut. The Minister stated that the purpose of the rent supplement like other social welfare programmes is to meet income maintenance needs and not long-term housing needs. While this may be true, rent allowance and rent supplement have become necessary elements of people's housing needs and more so in recent years when, as a result of the Government's mismanagement of housing, fewer people can afford to buy a house and have to rent at a time when rents are increasing. People on low incomes, particularly single parents, in need of rent allowance are the ones being hit.
The Minister stated that for the most part health boards decide whether an applicant for rent supplement is in need of accommodation without reference to the local authority. In my local authority in north Tipperary this has not been the case for a number of years. The rent allowance is linked to the application for local authority housing. To my knowledge those who apply for rent allowance must be on the housing list. Senator McCarthy has confirmed the same is true in west Cork. It is clearly the case that people will not get the allowance without being an accepted applicant for housing.
This cut will further institutionalise those in need of housing and create an even bigger problem. As has been stated by the housing organisations, it will certainly generate more homelessness. The Government is blithely happy to do this. This is yet another indication of how cut-off the Government is. It will take three weeks at most before Government backbenchers get the message and start bleating about this. They will appear whinging on the plinth as if it has nothing to do with them. However, the public know and are waiting in the long grass for the Government.
Mary Coughlan (Donegal South West, Fianna Fail)
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We have heard that for years.
Margaret Cox (Fianna Fail)
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I welcome the Minister to the House. I move amendment No. 1:
To delete all words after "Seanad Éireann," and substitute the following:
"noting as a consequence of the Estimates for 2004, that spending on social welfare is projected to increase to €10.65 billion in 2004, notes that these Estimates do not as of yet include any budgetary provision for increases in social welfare payment rates in 2004 and welcomes the continuing commitment of the Government to address the needs of disadvantaged groups in our society."
This evening I had hoped we might have had a debate that focused on the issues rather than the diatribe to which we have become used from the Labour Party and the Opposition benches in general.
Kathleen O'Meara (Labour)
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It is the truth. Does the Senator not want to hear the truth?
Margaret Cox (Fianna Fail)
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Anybody who believes that by spending of more than €40 billion in 2004 we are not looking after the people of this country is foolish. More than two thirds of the gross spending next year will be devoted to health, education and social welfare.
Kathleen O'Meara (Labour)
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For those who live in Kildare I suppose.
Margaret Cox (Fianna Fail)
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Public expenditure has increased from €18 billion in 1997 to more than €40 billion next year. We have increased wealth by more than half in that time. By prudent management and by reducing the national debt since 1997, there is now an additional €1 billion available for investment in public services, which otherwise would have been required for debt servicing. I did not see that mentioned in the manifestos of any of the Opposition parties.
Margaret Cox (Fianna Fail)
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I did not interrupt the Senators earlier.
Margaret Cox (Fianna Fail)
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Do we now want to go back to borrowing all the money so that we can give it away? That is not the type of country we want and the people did not elect this party to Government to do that. Social welfare expenditure in 2003 is almost double the level it was when the Labour Party and Fine Gael were last in Government. This unprecedented level of payment is all the more outstanding when we consider that the level of unemployment has been cut by more than half since Fianna Fáil took office. The figures announced in the Estimates this year, as in every other year, do not include social welfare rate increases that are announced on budget day. However, when it is considered that €10.6 billion is being set aside for social welfare after a reduction in unemployment rates from 10.3% in 1997 to 4.4% currently, we can see that there has been a real increase in the provision of social welfare. What should we do? Should we just keep spending? I have heard the cries about value for money or that the Government has wasted all the money that was gained in a growing economy with which, allegedly, it had nothing to do. This should be said to pensioners who got an increase. The average increase for pensioners since Fianna Fáil came into Government has been over €9 per annum.
In the other House today, the figure of £1.83 was mentioned as the increase given to pensioners by the former Minister, Proinsias de Rossa, MEP. I do not recollect that particular time of Government but is £1.83 something to be proud of as an increase for pensioners? We have given an average increase of over €9 per annum. In the programme for Government, which is what we are working under, we promised to increase—
Margaret Cox (Fianna Fail)
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—pensions to €200 per week in the lifetime of the Government and we are well on the way to achieving it.
Child benefit is the most significant and universally acknowledged tax free measure directed at relieving child poverty. When Fianna Fáil came into Government, child benefit was €38.09 per child and €49.52 for the third and subsequent children. This year, before the announcement of the increases on budget day, the rate is €125.60 for the first and second child and €157.30 for the third and subsequent children. That is paid from the beginning of the year. Announcements are not made in December with the payments being made in September. It comes through at the beginning of the following year.
Margaret Cox (Fianna Fail)
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These increases mean that in the period Fianna Fáil has been in office rates of child benefit have more than trebled. This benefit is paid to every family in the country. It is the fairest and most direct means of ensuring that we alleviate child poverty. There is no cut in that area.
Let us look at some of the things we propose to do and the criticisms levelled against us. We cannot continue to spend as if there was no tomorrow. We must look at how we spend. It is prudent to refocus our attitude towards spending to ensure the money we pay out goes to the people who need it most. People talk about the back to work education allowance. I know for a fact that some people give up jobs and go on to the live register for a period of six to nine months prior to applying for the back to work education allowance for third level education. That is a fact. By increasing it to 15 months, we will ensure that the people who—
Margaret Cox (Fianna Fail)
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I know it to be a fact because I have seen it happen. Any Senator who says it is not a fact is living in never-never land.
Kathleen O'Meara (Labour)
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It just displays the Senator's attitude.
Kathleen O'Meara (Labour)
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The Senator should join the Progressive Democrats.
Margaret Cox (Fianna Fail)
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My script was not supplied by anybody. I am stating a fact regarding this particular issue. If we see people going back to education after 15 months of unemployment through the back to education allowance, it will be a better focus of the scheme. It will allow other people to have money to which they are more entitled. It is being raised from six months to 15 months in respect of third level, not second level, and I do not have a difficulty with it.
One of the difficulties with rent allowance is that the people who benefit most are not those who receive the allowance and get housing and accommodation, but the landlords who sometimes get in excess of €800,000 or €900,000 per annum from the State for the provision of private rented accommodation. These include landlords who provide substandard accommodation to the most vulnerable in our society and it is time the whole system was reviewed.
I accept Senator O'Meara's point that we will see over the next couple of weeks the impact it will have on the community. We must be clear about how we implement that decision. If there is a need for review to ensure the homeless, disabled people and those most in need get that allowance under the discretion the Minister is continuing to allow at health board level, that must take place.
Social welfare payments must be put in context. There is an increase in the social welfare spend. The Book of Estimates involves €40 billion of funding and some €10.6 billion will be spent on social welfare. That is what we need to focus on and it is time to evaluate the schemes to make sure the money we are continuing to provides goes to where it is most needed, which is to look after, as Fianna Fáil has always done, the people most in need.
Maurice Cummins (Fine Gael)
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I welcome the Minister of State at the Department of Health and Children, Deputy O'Malley, and I look forward to hearing him try to defend the indefensible. The 16 cuts involved sound worse when they are read out compared to when one reads about them. In normal circumstances, there would be uproar if there were two or three such cuts. Obviously, by announcing all 16 together, the Minister wants to take the flak at the beginning. The Minister for Finance's statement prior to the election that there would be no cutbacks, hidden or otherwise, rings hollow in the context of the 16 cuts we are discussing. That is what the public will have in mind when they vote next year and, hopefully, in the next general election. They will be reminded of the Minister's statement. There were no cutbacks as regards the Punchestown development in the Minister's constituency. When those involved applied for €6.5 million, they were given it and they got another €6.5 million and more while sports clubs and communities all over the country applied for grants from the national lottery and had to wait for 50% or 60% grants for their projects. However, the centre in Punchestown received 100% financing and it is in this context that we must discuss the cuts.
A spokesman for the Society of St. Vincent de Paul described the proposed cuts as mean, petty and extremely discouraging. The organisation works on the ground with poor people, week in and week out. The spokesman also stated that the number of requests for help in the last year has increased dramatically. This is the Ireland of 2003 where fiscal rectitude is taking precedence over long-term social planning, which is on what the Government should be focused. These are not adjustments or reform of the social welfare system, as some Government spokespersons might like us to believe. They are savage cuts that will affect people who are trying to exist on meagre resources. They will hurt the most vulnerable sections of the community and, make no mistake, they are already hurting. One might say these cuts involve only a few euro, but for a single person on €124.80 per week or a married couple on €207 per week, every euro counts. The best financial planner would find it difficult to manage to provide for his or her family on such a low income. These cuts, when taken in conjunction with the wide array of stealth taxes, indicate that the poor and disadvantaged have suffered a great deal, mainly due to the policies of the Government.
I heard a Government spokesperson say recently that stealth or indirect taxes are the way forward, that they are a fairer system. It is not a fairer system because the poor must pay the same as the rich. The ESB's prices have increased by 13%, bus fares have increased by 9% and local authority charges have increased by more than 10%. VAT increases have added to the price of newspapers, fuel, hairdressers and food and drink. The poor must also pay these increases, which is the reason I said earlier that every euro counts. Cutting a few euro here and there from people on social welfare and low incomes can be devastating.
I will deal with some of the cuts that have been announced. I find it extraordinary that the supplement to the Money Advice and Budgeting Service has been discontinued. This is a critical level of assistance provided by community welfare officers to people who have fallen into debt and are in need of support. The MABS does a tremendous job in planning and rescheduling debts and the supplement was an important part of that system. The result of this cut will be to drive people back into the hands of unscrupulous moneylenders. These people are in dire circumstances and will be left with empty pockets and increasing debts.
The diet supplement is also to be discontinued which will have severe repercussions on those who previously benefited from the scheme. Significant extra costs are involved for special foods for coeliacs and persons with diabetes and so on. A person with an income of €124 receives a supplement ranging between €7 and €18 for a single person and between €12 and €23 for a married couple. The withdrawal of the supplement will cause severe hardship to many people. The Minister may say that community welfare officers can deal with hardship cases but this is transferring the blame and decision-making back into the hands of community welfare officers who are already grossly overworked.
As stated in the motion, the back to education allowance has been all but abolished. Combined with the cuts in vocational education committees for crèche facilities for people on VTOS, Youthreach and senior Traveller programmes, this is a major deterrent for single-parent families to educate themselves. This, in turn, makes their children more vulnerable to poverty and social alienation.
The conditions for rent allowance are severely restricted. The six month rule before an applicant qualifies for rent allowance will create major problems and will result in more people becoming homeless. The Government does not have any social housing plan to cater for the tens of thousands of people on local authority housing lists. The restricted provisions for rent allowance will force many more people onto this list and put even greater pressure on local authorities.
The Government is bereft of ideas when it has to resort to punishing the weakest sections of society with these savage cutbacks when, at the same time, generous tax concessions are in place for people who can take a hit without batting an eyelid. This assault on the living standards and educational opportunities of the most disadvantaged in society must be condemned. The pious platitude that the Government is committed to tackling disadvantage can be viewed in the context of the litany of broken promises we witness on a daily basis. With my party, I fully support the motion before the House.
Diarmuid Wilson (Fianna Fail)
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I second the amendment proposed by my colleague, Senator Cox. I welcome the Minister of State, Deputy Tim O'Malley, and pay tribute to the Minister for Social and Family Affairs, Deputy Coughlan.
I am delighted to have the opportunity to speak on the Estimates for 2004. I am proud to support the Government amendment to the motion. It is not my intention to bore Senators with figures or statistics but I want to put one important fact on the record. In 1997, when the people booted the motley crew of the rainbow coalition out of office, the total social welfare budget was €5.7 billion. This year the total budget for the Department of Social and Family Affairs is over €10.6 billion, which does not include the social welfare increases which will be announced in the budget in early December.
I have to laugh when I read the Private Members' motion submitted by the Labour Party condemning the Government for assaulting the living standards of the most disadvantaged in society.
Diarmuid Wilson (Fianna Fail)
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I like to control myself in public.
Maurice Cummins (Fine Gael)
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The people who suffer will not laugh.
Diarmuid Wilson (Fianna Fail)
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No party in Government has done more to improve the lot of the most disadvantaged than Fianna Fáil, the real labour party.
Diarmuid Wilson (Fianna Fail)
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The Labour Party is the party of motions, fine ideas and soundbites. What has it ever achieved?
Diarmuid Wilson (Fianna Fail)
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The answer is simple, it has achieved nothing. My constituents in County Cavan often say to me, that fellow Rabbitte, he is a great talker—
Michael McCarthy (Labour)
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Senator Wilson should be on the stage.
Diarmuid Wilson (Fianna Fail)
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—but what has he ever done, except pretend to get angry – very angry sometimes.
Diarmuid Wilson (Fianna Fail)
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He rocked the foundations of the State at one stage—
David Norris (Independent)
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Many people are getting angry. They are known for it.
Diarmuid Wilson (Fianna Fail)
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—if memory serves me. That was a ball of smoke and puff of wind as usual.
David Norris (Independent)
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What else would one expect from a rabbit?
Diarmuid Wilson (Fianna Fail)
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He then went on RTE and pontificated, shrouded in a straitjacket of pomposity, about how things should be done.
Kathleen O'Meara (Labour)
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Nice one. Who wrote that for Senator Wilson?
Diarmuid Wilson (Fianna Fail)
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Fianna Fáil is the party of action—
Diarmuid Wilson (Fianna Fail)
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—one with a proud record across the length and breadth of the country.
Shane Ross (Independent)
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Who wrote the script for the Senator?
Margaret Cox (Fianna Fail)
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It is not about the Minister, Deputy McCreevy, either, yet Opposition Senators spoke about him for half an hour. We are only following the precedent set by the Opposition.
Diarmuid Wilson (Fianna Fail)
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I ask the Leas-Chathaoirleach to forgive me for laughing to myself. Fianna Fáil has proven over the years that it is prepared to knuckle down and get the job done without running to RTE with soundbites and trying to look well on television. The Labour Party and its comrades talk the talk in regard to helping the less well-off in society.
Diarmuid Wilson (Fianna Fail)
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—they have never delivered to those they claim to represent. Fianna Fáil in Government introduced the minimum wage which is helping hundreds of thousands of low paid workers. Long-term unemployment, which is recognised as one of the greatest causes of poverty, has been successfully tackled and reduced to 1.4%, a figure well below the EU average. What did the Labour Party do the last time it was in control of the purse strings?
Diarmuid Wilson (Fianna Fail)
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In 1995, the Labour Party was given the opportunity to put its rhetoric into practice. Former Minister Proinsias de Rossa increased the old age pension by £1.80.
Kathleen O'Meara (Labour)
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What were Exchequer receipts then? What was the budget surplus?
Diarmuid Wilson (Fianna Fail)
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I do not wish to sound like the man I mentioned earlier and to whom we are not supposed to refer, but the Labour Party Members must have a brass neck to move tonight's motion. Thankfully, it was not long before the people of Ireland voted Labour and those who paid it lip-service out of office and elected a Government which has acted to address the needs of the less well-off.
Diarmuid Wilson (Fianna Fail)
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During the 1997 election campaign, Fianna Fáil promised to increase the old age pension to at least €127 per week during its term of Government and we delivered.
Diarmuid Wilson (Fianna Fail)
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During the 2002 election campaign, we promised to increase the State pension to €200 per week. Over our term of office, of which there are hopefully three years left, we will deliver on this promise. We are well on the way to doing so. We should not forget that over the three budgets of the rainbow coalition, the Labour Party Minister for Finance gave the pensioners who helped to create the Celtic tiger a total average increase of €2.95.
Kathleen O'Meara (Labour)
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What was the budget surplus in 1997?
Diarmuid Wilson (Fianna Fail)
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The 2004 Estimates should be considered in the context of the Government's overall strategy to ensure the economy is as well placed as possible to benefit from the global recovery. We must also protect the tremendous gains made since 1997. I echo the words of the Minister for Social and Family Affairs, Deputy Coughlan, who said earlier this week that she was pleased to have secured an increase in the social welfare Estimates. This increase underlines the Government's commitment to the elderly, care for children, the less well-off, the sick, those unable to care for themselves and the unemployed.
Senator Cummins said we had done nothing about social housing. He may choose to ignore the fact that the housing programmes proposed this year will cost in excess of €1.9 billion.
Maurice Cummins (Fine Gael)
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The key word is "proposed". It is the same with the other promises.
Diarmuid Wilson (Fianna Fail)
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That will be announced in the budget. It does not surprise me that Senator Cummins and his party can do nothing but rake up mud and throw it.
Maurice Cummins (Fine Gael)
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Fianna Fáil is bereft of ideas when it has to attack the poor.
Diarmuid Wilson (Fianna Fail)
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It would better become Senator Cummins, Fine Gael and the members of the Labour Party to develop a few workable policies. The people might then be interested in voting for them way down the line.
I am proud to be here to speak in favour of the amendment and to defend the Government and the policies of the Minister for Social and Family Affairs, Deputy Coughlan.
Maurice Cummins (Fine Gael)
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The Senator is here to defend the cuts.
Diarmuid Wilson (Fianna Fail)
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It is worth restating that the published Estimates do not include the additional social welfare increases which will be announced in the budget.
David Norris (Independent)
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I wish to share time with Senator Ross.
David Norris (Independent)
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The impression has been given by the Government side that it is merely the Labour Party which takes offence at these miserable, wretched and unutterably mean cuts. It is not. It is this entire side of the House plus The Irish Times which in an editorial on Saturday outlined its position under the headline "Aiming the cuts at the weakest" as follows:
The Estimates for 2004 make grim reading for anyone with a social conscience. The coalition Government is presiding over an outrageous assault on the living standards of the most vulnerable and impoverished sections of our society, as an alternative to higher income tax or more extensive borrowing.
Those unfortunate people who saw the fruits of the so-called Celtic tiger pass them by will be forced into even greater poverty.
The Irish Examiner published the headline "McCreevy's plans to hit the vulnerable". As has already been quoted by a colleague on this side, the Society of St. Vincent de Paul, which should certainly be seen as politically neutral, has said these cuts are wretched and will cause misery for many.
The amounts involved are comparatively small. That is certain in light of the fact that Senator Mansergh told the House with gay abandon this morning that €310 million was negligible and a mere bagatelle. If the Government feels like that, it should put the money back into the pockets of the poor from whom they filched it. Punchestown has been invoked, but this issue is greater than that. A large proportion of the 100 wealthiest individuals in this country pay no income tax at all because they have good accountants. We should forget Punchestown and look at the fact that bloodstock breeders pay no tax on stud fees which often run to tens of millions of euro. Despite this, the Government is taking away assistance in drugs, hospitals and back to education schemes. The Government is hitting the people who already cannot afford to have a decent life and are trying to do something with the help of social benefits. Of course, scroungers should be got rid of, but their number is pathetically small.
The problem with the back to education scheme was that it was too successful. People were glad to take it up and glad to receive an education. They did so in such numbers that the Department could not cope. In response, the time for which one has to be out of work has been raised from six to 18 months. How mean can one get? I am surprised anyone on the Government benches would attempt to justify it. If they seek a comparison, they should look at post-Thatcher Britain where a similar voluntary scheme, the work based learning for adults scheme, is in operation. Its provisions are virtually the same as ours. The criteria to obtain a place are that one must be aged at least 25, not on another government funded training programme and continuously unemployed for 26 weeks or more. In this country, the Government proposes to extend the period of unemployment to 18 months despite the fact that we are always priding ourselves on our wonderful education system. Education is said to be the key to success. It is, but we intend to keep it for ourselves and to further disbar people from accessing it.
This is not to say the scheme was a great administrative success. I have a document which states that 18 prospective candidates of the Galway Youth Federation's young mothers in education project were recently told that there was a four month delay in handling their applications for the back to education allowance administered by the Department of Social and Family Affairs. These candidates were simultaneously given 21 days by the Western Health Board to produce their back to education allowance approvals. What kind of way is this to treat vulnerable people? The people involved are the most vulnerable one could imagine.
Can Senator Cox stand over the removal of the crèche supplement? I have heard her speak about the need for crèches. I listened to what she said about those matters even though I am a mere man with no children. Unless things advance considerably in science through stem cell research, I am unlikely to have any. The support has now been taken away from the people who really need it. The meanest measure of all is the removal of dietary supplement assistance from people who suffer from various diseases and allergies including coeliac disease, diabetes and gluten allergies. The small amounts of money which would make it possible for them to enjoy a reasonable life are being taken away. Support is being taken away from people who are suffering from illnesses in terms of which there is no faking. It is a crude, miserable and wretched policy.
The increase in the drugs assistance threshold from €70 to €78 is really mean. If one is admitted to hospital, one must pay an extra €45 per night for the first ten nights. That is a great deal of money to someone on social welfare. It is really intolerable. This is meanness because these people are defenceless and these measures will not even produce a significant amount of money. It looks like a kind of sadism and it will backfire on the Government.
Shane Ross (Independent)
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The Labour Party has done us a service in tabling this motion, which I support. My immediate reaction was this was probably another motion in support of high spending without provision for accountability or costing. However, I am convinced by the arguments that it supports low or targeted spending on vulnerable people, with which Senators on this side of the House agree. This is not a catch-all motion to spend a great deal of money and give everyone what they want, which one might expect from the Opposition sometimes. Rather, this is about a small amount of money making a large number of people's lives tolerable and we should consider and support it.
Senator Norris touched on something which is personal to me when he referred to accident and emergency provisions. It appears there is no justification for cutting back on health services to poor people. I have to confess to ignorance in this regard but, for personal reasons, I have been visiting hospitals and have been involved with invalids and their rights. I was unaware of the extraordinary position that the richest people appear to get the largest benefits. I do not understand this. This is a free-for-all where people, regardless of their incomes, get free health services and pay nothing for sophisticated equipment which the poor cannot afford. I cannot understand why rich people are not asked to contribute to these services. The Eastern Health Board seems to provide extravagant and good health facilities for people who can afford to pay some money towards it. Why is this not happening? I though we were living in some sort of egalitarian regime, particularly in regard to the health service. However, this is not the case.
With a small redistribution of just €58 million and probably no hurt to anyone we could probably solve this problem by asking richer people to pay some contribution towards services for which they pay nothing at all. Perhaps the Minister of State and his colleagues would think about that. It would make no difference to the wealthy but an enormous difference to the people about whom we are talking.
I thank Senator Norris for raising the issue of stallion fees. It is ironic this motion has been tabled against the background of invidious cuts and at a time when a major court case is being taken by Mr. Alex Ferguson against Mr. John Magnier. What are they fighting about?
Shane Ross (Independent)
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They are fighting about tax free money from one stallion.
Shane Ross (Independent)
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This is the unacceptable face of capitalism since I guess that sum could pay for all these cuts. It is patently unjust. They can afford to go to court about money which they do not need by employing extremely expensive lawyers while people are suffering serious hardship. This points to the fact that such perfectly legal tax loopholes are socially unacceptable. As long as people with disabilities and health problems are made to suffer, we cannot continue to pursue this policy and claim to be an equitable or fair society.
I will be the first to support cuts in income tax because that is the way in which wealth is created in order that more money can be distributed to the people who deserve it. However, we cannot continue to give extraordinary privileges to a few people while other people are suffering such extraordinary disadvantage.
I agreed with everything Senator Norris said, apart from when he read from The Irish Times. A few days before the newspaper preached so eloquently about the most weak and vulnerable in society, The Irish Times was itself exposed as having paid the most extraordinary amounts of money to people under the guise of being a charitable trust. The Government is playing almost exactly the same game and the Opposition may have done so in the past. It is glaring hypocrisy that the newspaper could issue such an editorial on a Saturday, when one finds the same week that the top executives and directors are being paid huge sums of money – in some cases to ensure they do no work at all. They are not being overworked at the same time.
David Norris (Independent)
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That does not apply to the writer of the editorial.
Shane Ross (Independent)
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The editor is employed by those people and can be moved or removed. The people taking these vast amounts of money, more than €300,000 per annum, are the same people who were entrusted as the guardians of the high ethics of this trust. The guardians of these high ethics are the guardians of the vulnerable. Politicians should point out these sorts of things and I thank the Labour Party for doing so with this motion.
Jim Walsh (Fianna Fail)
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People listening to the contributions from the other side of the House would be forgiven for thinking they were living in a different country than the rest of us. While the arguments may be interesting political fodder, they do nothing for reasoned and enlightened debate in regard to how we manage our economy.
The Labour Party presided over probably the biggest dereliction of any Government in the history of this State and one would need to travel far to find a government which emulated the level of irresponsibility of Dr. Garret FitzGerald's Government from 1982 to 1987. Fine Gael would proffer the excuse that its attachment to the Labour Party forced him into a position whereby the Government had to take unwise economic decisions.
Michael McCarthy (Labour)
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That was because rates and car tax had been abolished.
Jim Walsh (Fianna Fail)
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The result was that unemployment grew dramatically at a time when the rest of Europe and economies internationally were on an upward trend. We missed out on all the development which took place in the 1980s, which would have improved and enhanced the standard of living for many people long before it did in the late 1990s.
One of the saddest legacies of that era was the number of young people forced to emigrate as a consequence of that gross mismanagement. I have said before that there should be some provision whereby when politicians of whatever hue make decisions for blatant perceived political advantage to the absolute disadvantage of the people, they should be brought to account and should not be allowed to serve in any future Administration or in either House.
Kathleen O'Meara (Labour)
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Is the Senator referring to former Deputy Charles Haughey or former Deputy Ray Burke?
James Bannon (Fine Gael)
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What about former Deputy Charles Haughey?
Maurice Cummins (Fine Gael)
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There is no one to clean up after him.
Jim Walsh (Fianna Fail)
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That needs to be done. People need to be reminded that the line being promulgated here is one of irresponsible fiscal management with a total disregard for budgets, public spending and taxpayers. Ultimately, as I keep reminding Opposition colleagues on some of the councils on which I serve, the Government does not generate any money. All it has to disperse is what it takes from the taxpayer. It has an obligation to be prudent and to manage that money to the best of its ability. We have seen fine examples of that over the past 14 or 15 years.
Jim Walsh (Fianna Fail)
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In the early years there was a great degree of pain in overcoming the tremendous hardship inflicted by the terrible Government of 1982 to 1987, to which I referred earlier.
Maurice Cummins (Fine Gael)
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Go back another ten years and we are still paying for that.
Jim Walsh (Fianna Fail)
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Through prudent fiscal and economic management we have now reached a situation undreamt of 20 years ago, and certainly undreamt of by the founding fathers of the State, where average income and GDP are well above the EU average and greater than that of our neighbour, who colonised the country for 700 years. That is a fantastic achievement and it would be an unforgivable sin if it was squandered through mismanagement.
In looking at the moneys which have been spent, it is worth highlighting some issues. This year the Minister is presiding over a budget in excess of €40 billion. This is a significant increase on any previous budget and is up 5% on last year's budget. Two-thirds of that budget is targeted at areas of need, including health, education and social welfare. In 2000 we spent €6.7 billion on social welfare. This will increase to €10.65 billion next year and that is before the application of any increases which will emerge on budget day. That sum is well in excess of what was available previously. These increases must be viewed against a background of significantly high unemployment in 1997 of 10.5%, now reduced to 4.4%. As a result, there is buoyancy in the figures which allows the additional moneys to be targeted elsewhere.
Some people referred to old age pensioners. Fianna Fáil came into power in 1997 after the first ever Labour Party Minister for Finance of the previous Administration had succeeded in giving a derisory increase of about €2 to old age pensioners. The Government is now committed to increasing the old age pension to €200 per week. Since 1997, child benefit has increased by 230%, from €38 per month to €125 per month.
During the last election I called to the house of an old lady in a Labour Party heartland. She told me that one of the Opposition candidates came to her confidently expecting her vote. She told him or her – I understand it was either Deputy Howlin or Ms Avril Doyle MEP – apologetically that she had a free television licence, free travel and her old age pension was in excess of €100 per week.
Jim Walsh (Fianna Fail)
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She added that her dead husband's occupational pension was paid to her tax free. She asked how she could be expected to vote other than for the incumbent Government and said she intended to do so. Many people followed that good advice.
Maurice Cummins (Fine Gael)
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I hope she will be alive next year.
Jim Walsh (Fianna Fail)
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If Senators travel around and talk to people they will find that they have never been better off.
I had intended dealing with individual items but as the Chair will not give me any injury time for the heckling that has taken place I will not. There is an onus on any good Minister to review areas of expenditure on particular items. Undoubtedly, there will be some tweaking of these and further targeting to ensure that those most in need benefit. This Administration has been tremendously successful in doing that. When I see the Opposition quoting The Irish Times as a paragon of either republican or socialist thinking, I must smile as it means that the argument is already well won.
The significant increases needed in the areas of health, education and social welfare are a priority for the Government, as evidenced by expenditure to date and by the projections for the future. Senator Norris commented that the Government protects wealthy people. That is totally debunked when one looks at the record of the former Labour Party Minister for Finance, Deputy Quinn. A number of schemes during his time as Minister sheltered high income earners from paying the right proportion of tax. Those schemes are coming to an end in 2004 through the work of the same Minister against whom Senator Norris has made other accusations.
James Bannon (Fine Gael)
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Is it correct that I heard Senator Walsh say he wants to disown the Fianna Fáil Party? I would not be surprised, given the party's antics in the run up to the publication of the Book of Estimates. Fianna Fáil is a party which has had many logos over the years. Senator Walsh would be proud of some of them but I do not believe he would be too proud of the logo I could attach to the party this evening –"the feel and fall party, FF". The people feel the brunt of the cutbacks which are the result of the lies they were told in the run-up to the last general election. Lies were told on every doorstep, in every constituency and in every electoral area in the Republic, as Fianna Fáil might like to refer to it.
It is time for Fianna Fáil to halt the scandal of cutbacks. People are fed up with this Administration, which is being propped up by the Progressive Democrats. We know from where the Progressive Democrats come. It is a right wing minority party and could be coupled with small minority right wing parties in the Middle East and Europe. That is where it belongs and the people will give their verdict in the local and European elections next year. I see evidence of this—
Rory Kiely (Fianna Fail)
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We are not speaking about next year's elections. Please speak to the motion.
James Bannon (Fine Gael)
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I want to provide the background. I see the evidence of this in my county, Longford, where they cannot find a—
Rory Kiely (Fianna Fail)
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I ask Senators to speak through the Chair and to stick to the subject matter of the motion.
James Bannon (Fine Gael)
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The poorest people are sick of the Government and the lies it told. The back to education allowance has been abolished.
James Bannon (Fine Gael)
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It is a cheap attack on the young people of this country, who Fianna Fáil tried to court over the years. In the last week, young people have approached me and told me they will be forced out of third level education by this Fianna Fáil Government.
Margaret Cox (Fianna Fail)
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The Senator should be accurate. It will continue for those who have it.
James Bannon (Fine Gael)
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Fianna Fáil always pretended that it looked after the youth of our country. That pretence is now seen as a lie on the part of Fianna Fáil and the Progressive Democrats. The crèche supplement for child care has been discontinued. This is a severe attack on working class mothers and poorer children in our society. It is a shame and a disgrace that this is being done by the two parties that pretended they always looked after the least well-off in society. They have now let them down in a very big way.
The Government is suggesting that disability and unemployment benefits will be done away with entirely. Local authorities throughout the country are cash starved. Funding for disabled persons and essential repairs grants ran out in most local authorities last September. There is no special aid for elderly people in the budgets of the health boards. My health board has been forced to cut essential services in some of the hospitals in the region. However, the Midland Health Board is not the only one facing these difficulties; others are also feeling the effects of the cutbacks. Senator Jim Walsh is not listening to the people and that was evident in his contribution earlier.
James Bannon (Fine Gael)
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It is evident that he is not listening to the people because charitable organisations and others described the Government cutbacks in the Book of Estimates as mean, lousy, cheap and miserable. Stealth taxes have been brought in by the Government, including higher rates and rents and several other charges. People are protesting on the streets of our capital on a daily basis about unfair charges introduced by the Government. There has been a significant cutback in the number of medical cards, even though the Government parties made many promises in that regard in the run up to the last general election. This is putting a huge strain on the health service because the Government introduced policies for which it did not budget. This is evident in the Book of Estimates.
In last year's budget, the Minister for Finance, Deputy McCreevy, slashed every area of social welfare and abolished the first-time buyer's grant. In the run up to the last general election – Fianna Fáil and the Progressive Democrats need to be reminded – he said there would be no cutbacks, hidden or otherwise. This was the lie of the decade when we saw the Books of Estimates for 2003 and 2004. Lies buy votes, but they do not give young people houses and elderly people services.
Local authorities are cash starved, although there are higher business rates. Many local authorities will fold up—
Margaret Cox (Fianna Fail)
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The rate of corporation tax is 12.5%.
Rory Kiely (Fianna Fail)
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Senator Bannon, without interruption.
James Bannon (Fine Gael)
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—this year and early next year because of high rates. People will not be able to take them. Every local authority has a housing crisis.
Margaret Cox (Fianna Fail)
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There have been more houses starts in the last few years than at any other time in the history of the State.
James Bannon (Fine Gael)
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Senator Jim Walsh gave a lecture on the Dr. Garret FitzGerald years. However, when Dr. FitzGerald left office, there were no housing waiting lists. We have had repeated cuts in the health service and huge increases in VHI charges. It is deplorable to see with what this Government is getting away. I hope the decent people of Ireland will stand up and give their verdict—
James Bannon (Fine Gael)
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—at next year's local and European elections. They must stand up because the way our economy has been destroyed is a disgrace. We are the laughing stock of Europe today.
Geraldine Feeney (Fianna Fail)
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The Senator's party started it.
James Bannon (Fine Gael)
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We had the Celtic tiger, about which we boasted in every other state in Europe. We are now seen as a shame and a disgrace because of the cutbacks.
Rory Kiely (Fianna Fail)
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Order, please. The Senator must conclude. He should not speak to Senators in that way.
Geraldine Feeney (Fianna Fail)
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I was enjoying that. I was at the Gaiety Theatre last night and I did not have such fun.
Rory Kiely (Fianna Fail)
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We are not here to enjoy the debate but to speak in it.
Geraldine Feeney (Fianna Fail)
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I know, a Chathaoirligh, and I understand your position.
I welcome the Minister of State for Health and Children, Deputy O'Malley. It is always a pleasure to see the Minister here as the representative of our partners in Government. I know Fine Gael does not have much good to say about the Minister's party, but we will always praise it.
James Bannon (Fine Gael)
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The Senator did not always say that. What about the Haughey-O'Malley era?
Geraldine Feeney (Fianna Fail)
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Stay quiet over there. Nobody interrupted the Senator.
I also welcome the Minister for Social and Family Affairs, Deputy Coughlan. As well as being a good, competent, strong Minister, she is also caring and kind. She could have come in last week when the Estimates were introduced and given one big bang to social welfare. Then the Opposition Members would have had something about which to crib and complain. However, there is nothing they can crib about and that is what is wrong with them. They are looking for something about which to complain. There were times when the Opposition was in power that it was done with a big bang and we had plenty about which to complain.
Jim Walsh (Fianna Fail)
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The Senator will have to read The Irish Times.
James Bannon (Fine Gael)
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Cuts, cuts and more cuts by Fianna Fáil.
Geraldine Feeney (Fianna Fail)
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I was listening to the debate and I heard the contributions of the Members of the Labour Party, which claims it is fighting the cases of the less well-off and those on the margins of society. I do not know where they have been but I would like to remind them of a few points. Obviously, these are not the points they read. They only read what suits them.
Spending is up by €6.5 billion since 1997, when Deputy Ruairí Quinn and the boys left office. They need to ask how high health is on our priority list. The Government is putting health so high on the agenda that there is a 10.4% increase in the Book of Estimates, whereas every other Department has received an average increase of 5% across the board.
The national treatment purchase fund will ensure that 9,500 people, who are the most vulnerable in our society, including the young and the elderly, will be treated throughout 2004.
James Bannon (Fine Gael)
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Nonsense. There is a three tier health system in this country.
Geraldine Feeney (Fianna Fail)
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Perhaps Senator Bannon could go on that scheme and have a little treatment because he will not stop interrupting me.
Rory Kiely (Fianna Fail)
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Order, please. The Senator should address the Chair.
Geraldine Feeney (Fianna Fail)
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I am aware of people in my constituency who have been treated under this scheme and I know it is wonderful. Does Senator Bannon know what they say, that they cannot wait for the Opposition to come knocking on the door because they have no ideas? It was a Fianna Fáil led Government that brought in schemes like this to help the people. The Government has allocated €32 million to this scheme and that is to be welcomed.
Capital funding of €509 million will be provided to facilitate improvements in hospital infrastructure. I am sorry that Senator O'Meara is not present because Santa is coming early to her. Senator O'Meara is on a soapbox, morning, noon and night, talking about the closure and downgrading of hospitals.
Geraldine Feeney (Fianna Fail)
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I have good news for Senator O'Meara.
Geraldine Feeney (Fianna Fail)
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I want to point out to her that Nenagh hospital—
Rory Kiely (Fianna Fail)
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No, you cannot. Senator O'Meara is not present and it is not proper to refer to her.
Rory Kiely (Fianna Fail)
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The Senator can refer to them if she does not refer to Senator O'Meara.
Geraldine Feeney (Fianna Fail)
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If she was here, what I would like to say to her—
Rory Kiely (Fianna Fail)
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No, the Senator should speak to the motion and rule that out, please.
Geraldine Feeney (Fianna Fail)
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The acute psychiatric unit in Nenagh hospital will be upgraded. In Our Lady's Hospital, Cashel, step-down facilities are being introduced, as well as facilities for patients with Alzheimer's disease, psychiatric services and services for the physically handicapped. If two hospitals in a small constituency were not enough, the Hospital of the Assumption in Thurles is also getting a unit for older people. If I was to bring that home to Sligo I would be welcomed with open arms.
Maurice Cummins (Fine Gael)
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The Minister, Deputy Smith, is not happy about it.
Geraldine Feeney (Fianna Fail)
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I am delighted to read in the Estimates that there will be money for the implementation of the Hanly report. The system outlined in that report will be wonderful when it is up and running.
If Senator Bannon is not talking about cuts, he is talking about extra charges. I would point out—
James Bannon (Fine Gael)
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She should walk down any street in Dublin and see people lying in the doorways, which is a damning indictment on this Government.
Geraldine Feeney (Fianna Fail)
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Will the Senator listen instead of losing the head? If he listened to me, he would learn something.
James Bannon (Fine Gael)
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The Senator should walk down any street and see the evidence of poverty.
Rory Kiely (Fianna Fail)
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Senators should not address one another from either side of the House. All debate should be through the Chair. There are too many interruptions.
Geraldine Feeney (Fianna Fail)
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I just want to point out to Senator Bannon, because he did raise it in his contribution, that we have increased spending by €1.6 billion to over €40 billion. That, if he can do his sums, is about 4.7% of average spending.
I am proud to stand over the Estimates in this Chamber. I am proud of the Minister for Social and Family Affairs, Deputy Coughlan, for the way she did the calculations. She will be known and regarded for that.
Mary Coughlan (Donegal South West, Fianna Fail)
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Ar dtús, ba mhaith liom a rá go bhfuil lúcháir orm bheith ar ais sa Teach le bheith páirteach sa díospóireacht thábhachtach seo.
Mary Coughlan (Donegal South West, Fianna Fail)
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Beidh sé faireáilte nuair a bheidh mé críochnaithe.
The level of resources which are allocated under the Abridged Estimate of 2004 to social welfare is a significant part of overall total Government spending and demonstrates this Government's continuing commitment to protecting the position of people who are less well off in our society.
As part of the Abridged Estimates announced by my colleague, the Minister for Finance, my Department has received its highest allocation ever, which will bring social welfare spending in 2004 to a total of €10.65 billion. This shows an increase of €355.5 million on 2003. Compared to 2001 the total amount committed has risen by €2.8 billion or 36%. I stress, however, that the Abridged Estimates do not include any additional expenditure which will be announced in the forthcoming December budget.
When one considers that €10.65 billion is being spent on social welfare after a reduction in unemployment rates from 10.3% in 1997 to 4.4% today, we can see that there has been a significant improvement in real terms in the level of social welfare provision. I am pleased to have secured an increase in the social welfare Estimate for the coming year even before account is taken of budgetary increases. This underlines this Government's commitment to the elderly, our children, those less well off, those who are sick, unable or incapable of caring for themselves and those who find themselves unemployed.
The Government is profoundly aware of the fact that many sectors of our society still need substantial assistance if they are to benefit from the major improvements in our economy and society in recent years. In Government, we have implemented the largest series of social welfare and child benefit increases in the history of this country. Because of our prudent management of the finances, and in turn the constant review and updating of social welfare schemes in line with my duty of care to ensure that limited resources are spent on those most in need next year, there will be record spending on health, education and social welfare. In fact, two thirds of total Government spending next year will go on these three areas of social spending. Never before has so much money been allocated to these three areas and never before has a Government put such an emphasis on the social agenda. Furthermore, this Government has made significant commitments under Sustaining Progress on the lowest rates of social welfare as well as commitments to pensioners and carers.
The Minister for Finance has indicated the economic and financial circumstances in which decisions on the Estimates were made. He has pointed out that the decisions made by Government in framing the 2004 Estimates are directed towards ensuring that we create the conditions necessary for our economy to be strongly positioned to benefit from the expected international upturn, to maintain and create employment and to increase the share of wealth in the country. Accordingly, the 2004 Estimates have been framed to stay within the overall spending guidelines agreed by the Government. This has had some impact on areas of social welfare spending where some spending pressures have arisen such as a substantial increase in claimants for child benefit payments, increased utility prices on the free schemes and an increase of almost 10% in the number of people claiming rent supplement payments. The number in receipt of rent supplement has increased to 60,000 people and the scheme now costs almost €330 million per year. It is important that we act now to ensure these pressures are addressed so as to ensure we can secure prosperity for all into the future.
We are not, however, seeking growth for its own sake. It is important that spending on social inclusion addresses the needs of those who are least likely to benefit from economic growth. Significant commitments have been made in these areas and we will seek to progress them in the context of the budget.
An estimated 970,000 people on average are expected to claim weekly social welfare payments next year and almost 1.5 million people, including dependants, will benefit from these payments. Compared to 1997, when this Government came into office, total social welfare expenditure will have almost doubled. During the same period, unemployment has dramatically declined to 4.4%. This has enabled substantial improvements to be made, not alone in the rates of social welfare payments but also in the conditions for entitlement to these services.
The spending pressures I identified earlier have emphasised the requirement that my Department ensures prudent management of the social welfare budget with a view to making sure the resources are best focused at the areas of greatest need. In two areas of social welfare spending we made commitments to our older people and to our children. All of our budgets have been characterised by pension measures designed to improve the position of older people in our society. Year on year, we have increased the pension. Today our record points to a duty of care.
Over the course of the past year, a number of spending items have been reviewed and areas of potential savings identified to ensure sound management of public funds. I stress that the savings which have been found are being recycled back into the total allocation provided to my Department as a result of the budget and the Estimates processes to ensure I am in a position to care for those less well off, disadvantaged, ill or unemployed by providing pensions, unemployment assistance and other social welfare payments.
I have announced a number of measures to ensure social welfare spending is best targeted at those in greatest need. For the most part, the measures will not affect existing claimants but will be introduced for new claimants from various starting points in 2004. Furthermore, many of the measures impact only on those households where there are already earnings from employment or where there is another social welfare payment.
The substance of the Opposition motion focuses on a number of the measures I announced last week. To take the motion on face value one might think the total amount of resources committed to social welfare has fallen. As I have noted, even before allowance is made for budgetary increases, this is far from the case. Instead I have received an increased allocation of €355.5 million.
The motion seems to imply that no scheme within the social welfare programme should be reviewed to see if it still meets the purpose for which it was established. All of the measures which were announced can be justified on their own terms. Circumstances change and Government objectives are updated and modernised. Cut-off points for the purpose of calculation of benefit, which were set at one time, need to be updated.
I will deal first with the change to the back to education allowance. The qualifying period for the BTEA will be increased from six months to 15 months in respect of the third level option The original period was set at a time when unemployment was considerably higher. Since then, unemployment has fallen dramatically. Furthermore, the Government has introduced the employment action plan which offers job placement or other supports for those who find it difficult to be placed in employment. Until now, with an intervention point for both second and third level at six months, the measure was not particularly well targeted at labour market disadvantage.
The policy measure which was announced now focuses available resources at those in greatest need for an intervention to prevent them from drifting into long-term unemployment and does not affect existing recipients of BTEA. This measure still allows people to avail of the second level option after six months in receipt of a payment. This effectively recognises the more urgent need for an intervention in the case of people who have not completed secondary education.
Under the terms of the supplementary welfare allowance scheme, payment of a weekly or monthly supplement may be made in respect of rent to eligible people in the State whose means are insufficient to meet their accommodation needs and who do not have accommodation available to them from any other source. There are currently 59,367 rent supplements in payment. Expenditure this year is expected to be over €330 million, an increase of approximately €76 million, or 30%, on the €254 million spent in 2002.
In this context, a number of measures in respect of the SWA rent supplement scheme will be implemented. These include: an increase in the rate of the minimum contribution to be made by the recipient, from €12 to €13 per week, in order to maintain the rate of the minimum contribution at approximately 10% of the basic personal rate of SWA; in future, if one member of a couple is in full-time employment, both will be excluded from claiming rent-mortgage supplement, a measure which will give effect to the original intention that SWA should not be paid in cases where there is full-time employment in a household; and health boards will be given the power to refuse rent supplement in cases where the applicant has not already been renting for a period of six months, with provisions for exceptions to the homeless, people who are at risk of becoming homeless and other vulnerable individuals.
The purpose of SWA rent supplement, like other social welfare programmes, is to meet income maintenance needs, not long-term housing needs. This measure is needed to refocus the scheme on income maintenance such as existing tenants who become unemployed and can no longer afford to pay their rent. For the most part, health boards decide whether an applicant for the rent supplement is in need of accommodation without reference to the local authority. In future, claimants for rent supplement will be referred to the local authority for an assessment of housing need in a more systematic manner. This measure will lead to an increased role for local authorities in this area. In addition, ways of improving the service given to people with long-term housing needs are currently under discussion with local authorities. Furthermore, rent supplement will no longer be paid to people who refuse offers of local authority accommodation or to those who leave such accommodation without reasonable cause.
Particular care will be taken to ensure that the interests of vulnerable groups, such as the homeless, the elderly and people with disabilities, are fully protected in the course of implementing the various SWA measures. Health boards will retain the discretion to make exceptions in individual cases. I emphasise that people who have particular problems and difficulties will be cared for and that no one will be made homeless because of these measures.
Mary Coughlan (Donegal South West, Fianna Fail)
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Last year I placed a cap on rent allowances as a measure to help reduce and control rents. At the time, this measure was howled at by members of the Opposition who even claimed that people would be made homeless by it. This has not happened. The Opposition continues to scaremonger and today is crying wolf over these prudent measures.
Mary Coughlan (Donegal South West, Fianna Fail)
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I announced the discontinuation of a supplement within the SWA scheme which was specially designated as a crèche supplement. The reason for this is that, as a result of State expenditure on crèche care and the tripling of child benefit payments since 1997, the need for the crèche supplement has been considerably reduced. In any event, this supplement was not applied uniformly across the various health boards and, in some cases, was being paid on a basis not originally intended when it was established. Claimants who have short-term need for crèche care as a result of family or personal circumstances will be accommodated through SWA exceptional needs payments, thereby ensuring that the original purpose of the crèche supplement is protected within the SWA system.
I also announced a number of measures that are being taken which will remove anomalies or better target resources paid from the social insurance fund, particularly those affecting short-term benefits such as unemployment and disability benefits. Changes in items such as the number of contributions required for access to benefits and pensions are a normal feature of social insurance systems. It should be noted that the Social Welfare Act 1997, introduced by the then Minister, Proinsias De Rossa, made provision for increasing the number of paid contributions required in the years ahead for entitlement to old age and retirement pensions. In addition, it makes considerable sense to take action to change the conditions underlying some schemes so as to deal with any anomalies or inefficiencies at an early stage. Some of the measures which were identified in the original motion fall into this category and I will now outline them.
The social welfare system seeks to provide income support in circumstances where persons cannot secure an income because of various contingencies such as illness or disability. While the flat rate payment structure does not seek to replace all income lost, it does, in general, try to avoid a situation where the payment is higher than the income that it is supposed to replace. When part-time workers were brought into the social insurance system in the early 1990s, it was necessary to introduce a number of reduced or graduated payment rates which would more closely relate the amount paid with the earnings that were lost.
Over time, with the increase in the main payment rates, the amount paid in DB and UB are now considerably in excess of the earnings to which they relate. In effect, the current thresholds have not been updated since 1993 and, consequently, represent a serious disincentive to employment. This makes no sense and, as a result, the current weekly earnings threshold for the purposes of payment of reduced rates of DB and UB are being increased from €88.88 to €150.
The maximum duration of unemployment benefit will be reduced from 390 days to 312 days where a person has less than 260 PRSI contributions paid since first entering employment. This measure recognises a longer, sustained employment record by more favourable treatment in terms of subsequent entitlements. Furthermore, it brings the contribution condition in line with that of DB in respect of an entitlement to a benefit extending over 12 months. This measure provides for a sound balance between the need for adequate protection against unemployment and protection of the position of the social insurance fund.
There is no doubt that the circumstances around which the forthcoming budget will be drawn up are significantly less promising than those of earlier years. However, the Government has committed itself to ensuring that social progress continues to be made side by side with economic progress. It is ploughing enormous resources into supporting, caring for and nurturing those less well off, those unemployed, the sick, older people and our children.
James Bannon (Fine Gael)
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The Minister is not living in the real world.
Mary Coughlan (Donegal South West, Fianna Fail)
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Next year, because of this commitment, approximately one in three euro spent by the Government will be spent on social welfare, education or health. We will seek to ensure that not only will the progress in recent years not be undone but that our society and economy continue to make progress towards their goals.
Mary Henry (Independent)
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I welcome the Minister. I do not have to declare an interest to her because she is aware that I am the president of Cherish, the lone parents organisation, and she attended at many of our openings in the past.
This is another occasion on which I am forced to wonder if the right arm of the Government knows what the left arm is doing.
Mary Henry (Independent)
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This week I attended the launch, by the Minister for Health and Children, of the Crisis Pregnancy Agency's strategy. The first five recommendations of the strategy are totally ignored and denigrated by the various actions that are being taken in the Book of Estimates. A considerable amount of money has been given to the Crisis Pregnancy Agency in order to reduce the level of crisis pregnancies. The first of the five recommendations, in response to a question on how the strategy will reduce the number of women with crisis pregnancies who opt for abortion, states that the agency will work to provide better supports for lone parents. This will certainly not be included in the proposals brought forward by the Minister for Finance, Deputy McCreevy.
The second recommendation is "to inform policy makers and key decision makers about critical issues." The agency has given us a booklet and, therefore, I presume we are expected to read it so that we will implement what it considers the best policies. The third aim is "to work with our partners to improve the availability of low cost child care" but the crèche allowance has been abolished. The fourth aim is "to work with our partners to improve income supports for lone parents." This has been severely affected by many of the measures introduced by the Minister. The final aim is "to work with our partners to make it easier for lone parents to stay in education, training and employment", yet the back to education allowance has been decimated.
I have been a great supporter of the allowance because many lone parents are poorly educated. For example, 10% have a third level education, 18% have a higher secondary education, 25% have a lower secondary education and 47% have only a primary education. The back to education allowance for secondary level has been abolished and it has been severely depleted for those wishing to attend third level colleges. However, the scheme has been a major success because the only way to remove people from the poverty trap is to enable them to attain a better education so that they can subsequently take up employment. This cutback will have a significant impact, unfortunately, on the number of women who may decide to have abortions.
The supplementary welfare allowance and rent supplement will be reduced. One must rent an apartment outside one's home for six months prior to consideration for the rent supplement. However, pregnancies can occur unexpectedly and people may be thrown out of the family home. How are they supposed to rent? The community welfare officer will exercise discretion but one agency will work against the other on this issue. I sometimes wonder whether there is co-ordination and co-operation between the various agencies producing reports and implementing policy. This is not the first time I have complained about this. Last week I referred to the recommendations made by Maureen Gaffney on social capital.
The crèche allowance will be abolished. How will women who wish to return to the education system or to the workplace manage, given the cost of child care is a serious problem? I could go on about various issues. The Minister will have read the strategic summary published by the Crisis Pregnancy Agency but its first set of recommendations has been totally ignored. I find the situation appalling.
Derek McDowell (Labour)
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Cuirim fáilte roimh an Aire. Bhí díospóireacht shuimiúil againn agus gabhaim buíochas do gach éinne ar achan taobh den Teach a ghlac páirt inti.
Government Members made much of the total budget dedicated to social welfare because it amounts to €10 billion, which is a great deal of money. The social welfare budget has increased substantially during the economic boom. However, it is not difficult to turn that argument on its head because it begs us to ask why it is necessary to make cuts amounting to only €58 million, if we take the Department's Estimate seriously. Despite the availability of a significant budget to the Department, it institutes small, petty but, nonetheless, painful cuts, which will save only €58 million, because it was instructed to do so by the Department of Finance. The Department of Finance sent a letter to the Department of Social and Family Affairs in June or July pointing out that cuts must be made totalling €100 million, for example, and a few months later the Department responded saying it had found €58 million in cutbacks and asked the Department of Finance if it would accept that. The Minister for Finance then begrudgingly said "Why not?"
These cuts have not stood up in this debate or previously. There is no need for them, as they account for little in terms of the national finances, but they are painful and difficult for those on the receiving end. Those who depend on the dietary allowance, rent supplement or other supplementary welfare provisions will feel the cutbacks badly but this is tiddlywinks to the Department for Finance. There is a serious onus on the Minister for Finance to come into both Houses and stand up the necessity for these cutbacks.
The cutback in rent allowance, for which one can only qualify after six months, has correctly attracted most attention. This means people who are forced to leave the family home because of family or marital breakdown, overcrowding or a crisis pregnancy are no longer entitled to rent allowance as of right. The Minister may say the Department is not a housing agency and that the total number of people claiming rent allowance at 59,000 is too high because it was never intended to be widely used. Perhaps the Department is not a housing agency but, as the Minister pointed out in her contribution, the allowance was introduced to assist people who did not have an alternative and who needed the supplement to remain in rented accommodation. The bottom line is there is no alternative for a significant number of people. Those people, who are being told by the Minister that she will no longer look after them, do not have an alternative. Some will become homeless but more will remain in accommodation which is wholly inappropriate and unsuitable. They will reside in overcrowded accommodation with their parents or they will end up trespassing on the goodwill of others.
The BTWA cutback is minor and will not result in much of a saving. However, it ignores the current state of the labour market. Significant changes have taken place in recent years and the Minister has pointed to a number. Ireland does not have the reservoir of well educated people it had four or five years ago whom multinationals want to employ. Everybody needs to be encouraged to continue in third level education or, if they are unemployed, to re-enter third level education so they can take up jobs and the State can continue to attract foreign direct investment, which has been essential to its economic growth in recent years. There is no good or logical reason the cutback proposed by the Minister should be implemented. She referred to "retargeting at second level." The incentive exists to take up second level education. There is no retargeting involved as she is making it more difficult to receive an allowance to take up third level education. There is no justification for this in current circumstances as little money will be saved and it does not make sense.
Senator Henry referred to lone parents. All surveys conducted on poverty in Ireland point out conclusively that lone parents are the most likely to fall into the poverty trap. The agreed approach of all parties in recent years has been to encourage lone parents who want to take up employment. While the effect of the cutbacks overall is marginal, lone parents will be discouraged from entering the workplace. The crèche allowance will have an effect on certain people, as it enables people who need to take up employment quickly to do so.
Derek McDowell (Labour)
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However, there will be changes in eligibility which will primarily affect lone parents. The Minister has repeated serious commitments made by the Government to increase the old age pension to €200 per week and the lowest rate of social welfare to €180 per week in a few years. Her predecessor made no tangible progress last year in that regard.
It will be interesting to see whether some progress will be made in the forthcoming budget. We will keep a close watch for announcements by the Minister and her colleagues within the next few weeks. Increases in social welfare benefits and allowances which simply cover the rate of inflation do not go anywhere near meeting the targets which the Minister has so happily repeated in the House this evening.
I am pleased with the support our motion has received on this side of the House. Senators on the other side must, in their hearts, be asking, "why is our Government doing that when we do not need to do it?" The bottom line is that the so-called need for the present cuts has not been justified, either in this debate or elsewhere, because it cannot and will not.
Amendment put.
Mary O'Rourke