December 11 2009

Dáil Debates

• Social Welfare Bill: Budget 2010

DÁIL DEBATES

• Social Welfare Bill: Budget 2010

[Please note this is not the debate in full. Only contributions deemed to be most relevant are included]

Deputy Mary Hanafin:…We appreciate the work done by carers in particular. Carers are the first to recognise that not only have their basic payments increased in recent years and that the disregards were also increased. In addition, carers can avail of free travel and household benefits. The groups representing carers requested, in the strongest terms, that we should not touch the half-rate allowance or the respite grant…The respite care grant has increased to €1,700. When it was first introduced, the rate of payment was only €250. The grant is paid to those who do not receive carer’s allowance. Therefore, it constitutes a real recognition for these individuals. We could have cut the respite care grant and left the rate unchanged. However, this would have had an impact on a greater number of carers so we chose not to do so…We did not touch the disregards for carers. Very generous disregards apply in circumstances where carers or their spouses are allowed to work…A couple with two children can earn in the region of €37,200 and still receive the maximum rate of carer’s allowance. In light of the disregards that exist, we are trying to ensure that carers, depending on family circumstances, have the opportunity to work outside the home as well. We recognise and appreciate these individuals for the work they do. The same applies in respect of the domiciliary care allowance for parents who have children with special needs. We did not cut this allowance, even though the people in this group are of working age. It was important that we did not reduce the rate of this allowance. Some €650 million will be spent on carer’s allowance, carer’s benefit, the respite care grant and the half-rate carer’s allowance in 2009. This compares to an amount of €46 million being spent on them just over ten years ago. That is a very big contribution…While it is regrettable that we have been obliged to cut the weekly rate, it would not have been possible to exclude just one group. We could not, for example, have cut the rates paid to carers and not cut those relating to another of the working-age groups. There has been a great deal of discussion with regard to the sensitivities that apply in respect cutting allowances for people with disabilities. I accept that we are talking here about an extremely vulnerable group…The rate of payment on disability benefit has increased from €89.70 in 1997 to €204 this year….It would have been far worse for people with disabilities if we had been obliged to cut back on home help, home care packages, respite care or day care places…An additional €10 million has been invested in home care packages…We are ensuring that there will be no diminution of the services available for people with disabilities. That is the type of choice the Government faced when trying to frame the budget. There were recommendations to the effect that the various disability groups, carers groups, and so on, should have been left out…If that had been accepted, we would have been obliged to take €100 million or €120 million from another Department’s budget, which would have caused undue hardship. I mentioned reductions in the cost of living. I know the figures are far better for people who perhaps have a mortgage or cars, but the prices relating to energy, clothing, footwear and food have also decreased and this has an impact on everyone…There has been much discussion with regard to fraud and combating fraud, which is a major priority for the Government and the Department of Social and Family Affairs…There is absolutely no evidence that the figures which were bandied about on a recent television programme to the effect that 10% of the people on social welfare schemes are engaged in fraud…The level of fraud is extremely small. However, the level of fraud among some categories of people on certain schemes can be quite high.

Deputy Denis Naughten (FG):…It is timely that the latest set of inflation figures were published subsequent to the budget. When the Minister for Finance came to the House on Wednesday he was working on the basis that annual inflation was running at 6.5%. The European measure of inflation which is a far more accurate measure shows that inflation is running at 2.8% which is 1.2% less than the cut in the social welfare budget introduced on Wednesday and 3.2% greater of a cut has been proposed this year when the Christmas bonus is taken into account along with the cut announced on Wednesday. These cuts are unjust and unfair, especially to carers, the disabled, blind people and it is morally wrong to introduce a cut of 6%. As my colleague, Deputy Kenny said, this is the first Minister in eight years who has introduced cuts to the must vulnerable in our society. The cuts before us fail to recognise the important role of carers in our community. Carers are people who give up work to care for an elderly or disabled person in the home thus saving the State approximately €40,000 a year and now having made that decision to commit to the long-term care of an individual, the Minister is cutting their payments. I have two questions for the Minister. The adult dependant allowance for those under 66 years is being cut. In the case of a person in receipt of a contributory old age pension, is the adult dependant allowance for a spouse under 66 years also being cut? If this is the case it is a misrepresentation to say that pensioners are not being affected by these cuts because we know they are being affected by the withdrawal of the Christmas bonus. The Minister referred on Second Stage to the issue of fraud. I have a letter dated 9 September 2009 relating to an applicant who was signing on for credits for jobseeker’s benefit. In this letter of 9 September she has been told that the next date for signing on is 7 July 2010. I am informed the reason it is being dragged out for so long is because there is a backlog of these cases and overcrowding in the local offices and the person is not in receipt of a payment. The individual in question, who is a non-Irish European citizen, is receiving credits for entitlement to some of benefit payments at a future date. If the Minister is focused on fraud, how is it possible for a person to be told to sign on again in 11 months at which point he or she will be given credited contributions for the intervening period? This contradicts her argument that she is tough on fraud. It is frustrating for people to see the Minister cut basic payments to vulnerable people while turning a blind eye to fraud.

Deputy Róisín Shortall (L): In recent months, the Minister and her colleagues have repeated the mantra that their priority is to protect the vulnerable. While their media advice may be that people will start to believe something if it is repeated sufficiently often, their mantra is a patent and blatant untruth. The Minister has not fulfilled her responsibility to protect the weakest. Even in difficult times, her predecessors fought their corner on behalf of the least well-off. Thousands of people look to the Minister to protect their incomes but she has clearly bought into the right-wing agenda of cutting the incomes of those at the margins. Rather than protecting the weakest, she has protected the richest, the millionaires, while allowing savage cuts to the incomes of the poorest. People have been completely misled by the Government spin we heard before the budget. If the Minister had any shame, she would think again about the position she holds. Perhaps her title should change to “Minister for Corporate Welfare” because she has protected the corporate welfare system. People with large incomes and substantial wealth are being entirely spared. The Government continues to facilitate those who have stashed away large amounts of money in pension schemes or property based schemes to avoid tax. The Minister, in protecting the strongest and wealthiest and hitting those on the lowest incomes, is engaging in morally indefensible and unacceptable behaviour. Her job is to protect those on social welfare. Economically, it is stupid to cut social welfare benefits because recipients cannot afford to save them and, by and large, spend every penny of their payment in local shops and on local services. This helps the economy. The Government is proposing to remove from the economy 4% of all social welfare payments while leaving untouched those who are best able to carry some of the burden, namely, people who can stash away or spend large sums abroad. This does little to help the economy. The Minister’s approach does not make sense economically. The Minister referred to the consumer price index, CPI. While we are all aware of the headline CPI figures, it is necessary to drill down into them. For example, the figure changes significantly if one removes housing from the equation. Although people with mortgages have benefited from interest rate reductions, many of those in receipt of welfare benefits do not have a mortgage. For such persons, the deflation rate is, therefore, much closer to 3% than 6%. The Minister decided to cut social welfare payments by 4%. In addition, the value of the payments has declined by 2% as a result of the abolition of the Christmas bonus. A significant number of social welfare recipients will also be hit by the increase in the threshold for the drug payments scheme. In real terms, the increase in costs from this measure is close to 2.5% because those affected by it will have to spend an additional €5 per week on medicines. Those in receipt of rent supplement will suffer a 4% cut. For a large number of recipients of social welfare payments, therefore, the cumulative effect of the cuts in payments will be approximately12.5%. There is no defence for imposing a cut of in excess of 12% in the income of many social welfare recipients. The Vincentian Partnership for Justice and other groups have done detailed research which shows that in most cases welfare payments are not sufficient to enable recipients, especially families with children, to live life with any kind of basic dignity. The reason we have a national anti-poverty strategy is to ensure Government Ministers should not introduce new proposals without first assessing how the proposals will impact on the poor. Every budget since 1998 has been poverty-proofed, as required under the national anti-poverty strategy. The Cabinet handbook states that memoranda for the Government involving significant policy proposals must indicate clearly the impact of the proposals on groups in poverty or at risk of falling into poverty. For the third time I ask the Minister to inform the House if she has complied with the requirement poverty-proof and assess the impact of these major proposals on people who are in poverty or at risk of poverty. Has this document been done and will she provide it?

Deputy Arthur Morgan (FG): Starting salaries for Deputies are approximately €100,100 per annum. This is the salary paid to me, as I have not received increments or other payments. After the 7.5% cut is applied to my salary, I will still be paid €92,500, subject to income tax and other deductions. The reduction is extremely modest when compared to what will happen to people who find themselves unemployed in future, particularly those aged under 24 years. While I appreciate the correct decision by the Taoiseach and Ministers to take a further pay cut of 5%, the reduction should have been substantially higher. Parliamentarians in Australia, for example, are paid AU $72,000 per annum. I am not sure of the precise exchange rate but understand this equates to approximately €50,000. Australia has a population of more than 21 million. As these figures show, Irish politicians are grossly overpaid and there is a case for making a substantial further reduction to their pay, certainly to €80,000 per Deputy per annum capped at €100,000. It is easier to target people earning in excess of €100,000 per annum than those with an income of €204 per week. The proposition before us is disgraceful. I hope some of the Independent Deputies, prodigal sons or whatever they are called will rise up and reject the budget.

Deputy Mary Hanafin: Deputy Naughten asked about the position of a pensioner whose spouse is a qualified adult aged under 66 years. The rates for qualified adults, whether aged over 66 or under 66 years, have been protected. My statement that pensioners have not been affected by the budget is, therefore, true. Deputy Shortall asked about a poverty impact assessment. An assessment is being done. The Combat Poverty Agency always published it within a few days of the budget. That is now being done within the Department and it will be published.

Deputy Róisín Shortall: The Minister does not understand what we are saying. Every year in the Budget Statement, there is a report from the social inclusion unit of the Department on the poverty proofing of the budget. It is published with the budget every year. Where is that document this year.

Deputy Mary Hanafin: It is being prepared and will be published in the next few days.

Deputy Michael D. Higgins (L):…I will be brief because we should get to as many amendments and sections as possible. At the time of the establishment of the Combat Poverty Agency I was a Member of the Oireachtas. I observed and was involved with the evolution of poverty proofing while working in the area of social policy. The purpose of the poverty proofing exercise that made its way into the Cabinet handbook was such that as the budget was being prepared the Government would be able to test the impact of a proposal on the affected or vulnerable group. That is totally different from preparing a descriptive scheme after the fact. The essence of the original Combat Poverty Agency proposal was to test the impact before it happened. Therefore, to suggest there will be a description some days after the budget leaves open the question of whether the principle has been sacrificed. It is a fact that since 1998 poverty proofing, in accordance with the Cabinet handbook, has been integral to the budget. It was the evidence that the budget had been so tested. There is a real difference and this requires an explanation, especially in a budget with such an impact on the very groups to which the handbook refers, namely, those in poverty and threatened with poverty.

Deputy Mary Hanafin: The Cabinet considered all elements of this budget including the impact it would have. We considered not only the rates and value of cuts in respect of social welfare but changes in other Departments that might impact on the same people. We also took into account the consumer price index, CPI, figures. I accept that not everyone has benefited in the same way from the change in prices. An analysis was carried out by the Department of Finance in respect of the decrease in prices during the year and how it has affected people. We examined that analysis carefully. The analysis suggested the CPI fell for retired households by 3.25%, one of our considerations in making decisions in respect of pensioners. Prices decreased by 5.75% for unemployed households and 7.5% for working households. Although the analysis shows the highest income people have benefited more from the drop in prices, the lowest income people have also benefited greatly from it. We considered the matter very carefully to establish the position in respect of the increases of 3.5% for this year. The process was carried out very carefully across Departments to establish the impact. Nevertheless, we found ourselves in the position of having to make these proposals.

Deputy Denis Naughten:…I oppose section 4 because of the unjust cuts proposed to all social assistance payments. We are talking about a 6% cut this side of Christmas, and after Christmas, to social assistance payments to those under the age of 66 and yet Ministers are only taking an additional 5% cut in their salaries. The types of cuts proposed for the most vulnerable people in society are immoral. It is disgraceful admission by the Government that the policy-proofing document, which should have been provided to the Cabinet prior to making and signing off on this decision, was not presented to it. Will the Minister respond to an issue which has come to my attention in regard to the carer’s allowance and the free travel scheme? I have a constituent who is in receipt of the carer’s allowance for a child under the age of 16 but over the age eight. While the carer gets the free travel pass, the child does not and the carer must pay for the child to attend hospital in Dublin four times each month. Since the costs involved would be minuscule, surely an amendment could be made to the free travel scheme when it comes before us next year to deal with that limited number of cases

Deputy Róisín Shortall:..In regard to people who depend on social assistance payments, the scale of the cuts contained in the Bill are completely acceptable. The Government had choices about how it would make the savings of €4 billion. There was no need to hit people on the lowest incomes. The Government could have required those who are very well off, in particular millionaires, to make a contribution and share the burden in terms of balancing the books. The Labour Party set out in detail how the Government could have done that, including ending the property reliefs available, the over-generous reliefs for pensions for millionaires and addressing the prospect of a third rate of tax for high earners. The Government had choices and the Minister for Social and Family Affairs, along with the rest of the Cabinet, chose to hit the most vulnerable rather than the better off or the millionaires who could have made a significant contribution to bridging the €4 billion gap. It was a conscious decision by this Government to hit the weakest and attack the vulnerable, which is utterly unacceptable on any level. Given that the Minister has had an opportunity to speak to the Minister for Finance, will she clarify the reason we have not received a statement on the impact of this budget on the poor?

Deputy Dinny McGinley (FG): I have a short time in which to speak to the issue. I have been here for many years and it is the first time we have had to address a section of a social welfare Bill where we are taking money from people. Of all the cutbacks in the area, the most severe are the withdrawal of money from the visually impaired and, in particular, the half carer’s allowance. I had a mother from my constituency on to me yesterday with a cry from the core of her heart. This woman, a widow, is looking after a son who eight years ago had a serious road accident as a result of a brain haemorrhage. The man was 30 at the time and is almost 38 now, and he lives on his island home with his mother, who looks after him 24 hours a day, 365 days a year. The man comes to Beaumont Hospital now and again; he spent 40 days at the hospital last summer. His mother accompanied him across the waves to Dublin and sat by his bedside in the hospital holding his hand day and night. He is a brilliant man, the eldest, who helped his mother raise the rest of his family. They all have jobs now but he was the main breadwinner when his father died. The only person who this 38-year-old man can communicate with is his mother. I know these people and I was in the hospitals in Letterkenny and Beaumont when he was there. I hope to see him within the next week again. The woman was in touch with the Department and got a very sympathetic hearing from whoever was there, although she wanted to speak to the Minister. She understands the difficulties and pressures felt by the Minister as well. I told the woman I would try to be her voice in Dáil Eireann today, when I would have the opportunity to put the case before the Minister. She is providing a service and it was a terrible knock to her the day before yesterday when she was told that her half carer’s allowance was to be reduced. She told me it was not about the money she would lose, be it €4 or €5, although she could do with every euro she could get. She told me that what she has been doing for eight years does not seem to get any recognition or sympathy from anybody. The care and dedication that woman has shown to that man is something only a loving mother could provide. If that boy was in hospital, it would cost the State hundreds of thousands of euro per year, and it would have cost €1 million over the course of the eight years. The consultant in Beaumont, who I will name to the Minister in private as I do not want to give names in the House, said that the man would have been dead years ago if not for the mother’s loving and tender care. She is under 66. We often overlook this area. I know this woman and her family and there are probably many such examples throughout the country. There is an 82-year-old grandmother in my constituency whose grandson had a serious accident a year and a half ago. He is a young boy not yet 20 but he cannot talk, walk, eat or anything else for himself. That woman is lucky because although she is giving the same kind of care as the first woman, she will not lose anything because she happens to be 82 years old. There is a discrepancy. However, I told this Donegal mother that I knew the Minister very well and that she is humane and does not have a heart of stone. She comes from a good Christian family and I know her parents. I do not say this in a patronising fashion. I do not think the Minister would take this action deliberately against that woman. I told her if I had the opportunity during the debate of this Bill to put that simple case to the Minister, I would do so. It is not the money that worries the woman but the fact that her dedication over the course of the past eight years, no matter whether her son is in Donegal or the hospitals in Letterkenny and Dublin, is not recognised. She is by her son’s side. To put it mildly, it is very cruel for her to be deducted the €4 or €5 per week. She will continue caring for her son anyway and will never let him go to hospital. He will get the care which she gives in a professional manner; that has been recognised in every hospital from here to Donegal, including the one in Dublin. I am very concerned about this and I know the Minister will demonstrate concern also. I do not know if the Minister can do anything about this but perhaps we can propose an amendment to the Bill. A mother of such dedication, or a parent or carer who has given that amount of time, care and nursing to people who cannot communicate or do anything for themselves, should not have the allowance cut. This House would not be living up to its reputation as a humane place or a democracy if we deprived that woman of these €4 or €5. Ultimately, she wants some recognition for what she and others like her are doing. Only mothers give tender and loving care like this. I am thankful for the opportunity to put this on record. There is a discrepancy and perhaps the Minister will have the opportunity to put it right. This woman was on to the Department yesterday and very well received by whomever she spoke to, although she was emotional. Anybody who knew the case would also be emotional.

Deputy David Stanton (FG):…In 2004, the National Disability Authority and Indecon carried out research into the cost of disability payment. They maintained at the time that there was an additional cost of living payment for people with disabilities of about €40 per week. They recognised that a person with a disability has more costs, because he or she needs extra heating, extra clothes and possibly a special diet and so on. Since then, organisations such as the Disability Federation of Ireland have been lobbying for this payment for the special cost of disability. Instead of giving these people more, the Government has decided to reduce the payment by €8.30 per week, which is about €431 per annum. It does not seem like much, but for a person on €10,000 per annum, it is a lot. This is particularly the case when an advisory body set up by this House to advise on disabilities decided that an extra payment was needed. Did the National Disability Authority give any advice to the Government? Was it asked for any advice on the impact of reducing this payment to people with disabilities? If this has not happened, does the Minister have any intention of consulting with the National Disability Authority on the impact of these cutbacks on people with disabilities, carers and so on? Many of these people are housebound and they are in need of support rather than being attacked. Carers are often looking after these people, and their payment is also being cut. It will make it very difficult for people who are already on the edge. Many of these people with disabilities may have to go into institutions such as nursing homes and hospitals. This will be at an increased cost to the State, not at a reduced cost. I implore the Minister to look at this again. I will not be supporting this cut. It would have been bad enough to leave it as it was, but to reduce it is appalling. These people have already lost the Christmas bonus and many of them have seen rent supplement reduced. The Government also closed down the Combat Poverty Agency, which was an independent body that commented on issues like this.People with disabilities are two and a half times more likely to be unemployed. The Minister for Finance has told us that anybody under 65 can get a job and supplementary income. That is not possible for many people with a disability. This is one particular group of people that has been singled out by the Government. Either Fianna Fáil is completely in the pockets of very wealthy people who have got off scot free, or else the country is in such a bad way that we are going down the Swanee very quickly. This Government has been in charge for the last 12 years, so it is responsible for that. We seem to be dealing with heartless Ministers and a heartless Government, but I appeal to anybody in Fianna Fáil with a conscience not to cut payments to people with disabilities such as blind people, many of whom have barely enough to continue. The Minister for Justice, Equality and Law Reform shouted across the floor of the Chamber this morning that we opposed increases. We did not oppose the increases given by the former Minister, the late Seamus Brennan. We worked with him and supported him in much of what he did. We encouraged him to bring forward a policy to deal with young carers. That has not happened. These are children working at home caring for adults and others with disabilities. There has been no policy from the Government on this, nor on cohabitation, even though policy was promised on it years ago. These cuts are retrograde and I implore that they be rescinded.

…Deputy Mary Hanafin: Deputy McGinley referred to the half rate payment for carers. The rate will be reduced to half the new rate of the carer’s benefit. Carers asked us not to abolish the half rate carer’s allowance, as recommended in the McCarthy report. While I understand that no one wants the payment to be reduced by €4.25 per week, carers are relieved that the scheme was not abolished. The case raised by Deputy Crawford provides me with an opportunity to highlight one example which could be useful to Deputies. A widow with three children who works part time and is in receipt of the contributory pension would receive €291 per week. Assuming she is working 19 hours per week on the minimum wage, she would receive a further €163 per week. On this income, with three children, she would qualify for the family income supplement under which she would receive a further €149 per week. This would make a significant difference to her income as she would receive a total of €725 per week, of which €562 would be paid by the State. I am not trying to justify a cut in her social welfare payment. Deputy Stanton asked about the policy on young carers. The Minister of State with responsibility for children and youth affairs is working on this issue. As we did not have empirical evidence on the number of carers, the issue is the subject of a study. Deputy Morgan asked about reductions in jobseeker’s allowance and welfare dependency. Family income supplement, which bridges the gap between welfare and work, was introduced to minimise welfare dependency. This was also the reason we compensated recipients of family income supplement and social welfare for the reduction in child benefit. Deputy Michael D’Arcy indicated that the Estimate does not refer to family resource centres. The centres are not a specific heading in the Estimate because they are included under the Family Support Agency. Funding for services provided by family resource centres has not been reduced. Funding for the support agencies, of which there are four, has been cut by €2 million and plans to expand them and increase their number will not proceed in the next couple of years. While we will cut back at that end, the services provided on the ground by 107 family resource centres will not be affected by the measures. It was obvious from Deputy Lee’s contribution in the House and on national media last night that he had not read the proposals on young people in the budget or the legislation. Two statements the Deputy made in the House need to be corrected. First, he indicated that a young person who worked from the age of 17 to 24 years would only receive €150 per week. This is wrong because a person with a work record would receive the full adult rate of jobseeker’s benefit. If the person subsequently dropped to jobseeker’s allowance, he or she would continue to receive the full adult rate. Second, Deputy Lee stated that a young married couple with children would only receive €100 or €150 per week. That is wrong because anyone with dependent children will receive the full payment…Unfortunately, those who receive disability or invalidity payments will be affected by the cuts. Deputies have asked how much it would have cost if we had not reduced payments to those in receipt of disability payments and so on. The cost of not doing so would have been almost €108 million. It would have been necessary to find this expenditure in other Departments or in my Department’s spending. I was asked whether I had spoken to disability groups. I met representatives of these groups separately and they attended the pre-budget forum…Cutbacks have not been made in respite care beds, day care places, primary care teams or any other services available to people with a disability…An additional €10 million has been provided to deliver more home care packages. The choice facing us was whether to reduce payments, bad as such a step is, or place the burden on the Department of Health and Children. I believe that if one reduced services by more - there are many with disabilities who would agree - it would have impacted upon such people more seriously. I agree with the remarks of Deputy Ó Snodaigh on the salaries of some people in the agencies to which he referred. The Government does not set those salaries. I fully agree it is outrageous for the head of a body such as Coillte or the ESB to receive a salary of €400,000 or more. It goes against everything that people in this House attempt to do and everything to which people throughout the country are trying to adapt. I trust they will take some leadership as well, in the same way — let me put this on the record — as those of us in the House, the Taoiseach and Ministers. We are very well paid and I recognise as much…Certain Members have criticised us for making these choices. It was not a case of trying to generate more in revenue and therefore we could cut back on expenditure. In attempting to take out €4 billion from Exchequer spending, it had to come from our expenditure. People, including outsiders, urged us not to cut the rates and to cut the extras. The extras would have imposed more hardship on more people. Let us consider the respite care grant. It has grown from €245 to €1,700 and a change to that would have had a greater financial impact on thousands more people than simply cutting the rate. As a Minister it would have been easier to stand and refrain from cutting the rate and simply cut the grant.

…Deputy Róisín Shortall: Words comes cheap. The Minister continues to engage in the spin in which all members of the Government have been involved in recent weeks. The Minister will be judged by her actions. Her actions show clearly that she set out deliberately to hit the weakest in society. Rather than protecting the vulnerable, she has protected the rich. The Minister has protected millionaires. Those people referred to previously who earn vast salaries will not pay one extra cent in tax, nor will those who can avail of various property reliefs. None of the property reliefs have been affected although the Government could have raised €430 million through such a measure. Those with vast pension schemes that attract tax relief on more than €5 million remain untouched, as do those that earn €300,000, €400,000, €500,000 and €600,000 or more per year. The Minister set out very clearly to target the weakest in society such as those dependent on social welfare. As the Minister for Social and Family Affairs, Deputy Hanafin should be ashamed of herself because she has done nothing to protect those people who look to her to provide some social protection. The Minister should stop trying to misrepresent the situation. It is clear she had choices. A fair budget could have been introduced which could have ensured those who had most would contribute something to solve the problems. She could have protected those at the lowest levels but failed to do so. She chose to hit the weak and those dependent on social welfare and chose to ignore those who have very large incomes and a good deal of wealth. The Minister decided to leave them untouched and she will be judged by her actions, not by her untruthful words. I wish to put a question to the Minister. During the last vote she had an opportunity to ask the Minister for Finance why he did not produce a statement on the poverty proofing of the budget, as required under the national anti-poverty strategy and in accordance with the Cabinet handbook. Will the Minister provide an answer on that matter now? Was a statement produced and, if not, why not? Does the Minister believe the Government can simply disregard the rules and regulations in place which require it to pay some attention to the impact of its decisions on the weakest?

…Deputy Michael D’Arcy: The Minister answered my query on resources centres and I thank her for that information. However, the main issue I highlighted was the cost of administration in each Department. Some costs have gone up, including those of the Minister’s Department. I appreciate there are more staff and a good deal more work to do now in that Department. However, when the administration costs of the Department of Communications Energy and Natural Resources increase, it makes my blood boil to hear from some quarters that there is no alternative. The Minister is here representing the Government. There is a reduction of 0.6% in administration costs, but the Minister is taking money from the blind and from carers. Where was the reform the Minister should have been spearheading to try to ensure those people were protected? Was there any previous attempt to reduce administration costs? It is a fair question. The cost of administration in 2009 was €4.465 billion, but the book of estimates we received on Wednesday projected the cost for 2010 at €4.435 billion, a reduction of a little over 0.6%. Yet the Minister is cutting allowances for carers, blind people and widows. I would like an explanation from the Minister.

…Deputy Michael D. Higgins: My point relates directly to what the Minister has just said. I will be brief and I hope my point is understood. The whole thrust of our approach is that in the present circumstances, as many Deputies have mentioned, the Minister had an opportunity of recasting our approach towards social protection. I have said with regard the budget and other matters that we should attempt to establish a floor beneath which people would not be allowed to fall. I argued that strongly from the point of view of a citizenship model. That would have made the participation of citizens within this State, in terms of inclusiveness, welfare and safety, independent of fluctuations in economic growth. It is perfectly respectable for the Minister to differ with me on that issue, but she cannot just say there is no other way. That was said by one of the most reprehensible participants in political life of the last century, Margaret Thatcher. There are other ways. If the Minister had taken that approach, she could have defined it in the following way. Any Minister for social welfare or policy makes a choice among three models. One is the distribution of whatever is available from surplus. The second is payments related to whatever a person has earned during his or her lifetime. The third model is one in which we consistently try to redistribute opportunities and security to those who are less well off. This is a redistributive model. There is no point in suggesting that any of us is lesser in our economic probity by simply advancing that model. I do it for a specific reason. The Minister gave us a precis of how we came to be here in terms of the public finances. However, we must consider the history of a series of budgets that provided tax reliefs. The bottom 20% of taxpayers used 1% of the tax reliefs, while 77% of the top tax reliefs — on such things as spas and car parks — were used by people on incomes of more than €100,000, while more than half, at 60-odd percent, were used by people earning more than €200,000. Those budgets provided massive opportunities for those with high disposable income. What about the notion that the poor dears are shrinking in number and there are not that many of them to give us more money? The Minister for Finance said in his budget statement that he was doing something very radical by giving net high income earners — as adjudged by the Revenue Commissioners — an effective tax rate of 30%. He is doing this on the basis that people will throw millions in the faces of poor people around the country — he is simply saying that philanthropy will do what the State will not do. These people will have to pay €200,000. It is time to put a stop to this nonsense. We heard from the former Minister, Charlie McCreevy, that there was no money out there. What about all the money that was lifted out of the economy and invested abroad? What about all the money that was forked into pension funds for people earning a couple of hundred thousand? I agree with one thing the Minister said. She said it was obscene for people to be paid €400,000, and I agree with her. Therefore, I find it obscene that people feel it is acceptable to earn a similar amount as a part-time non-executive director of a bank. We are agreed on that. However, it is simply not true to say there are no riches out there that could have been accumulated. There could have been a rake-back from those who enjoyed property reliefs worth €400 million. The Minister can defend her position as much as she wishes, but she cannot say there was no alternative. There was an alternative. The Government could have pursued this money through taxation or by reconfiguration with regard to forms of capital expenditure. However, the most important thing of all, which must be admitted even by people on the Government side and those who support the Government, is that there was an opportunity for an entirely new departure in social protection. Let the record state that when we were saying Ireland had the second highest incomes in the world and the best incomes in the European Union, we were never above the bottom three in the EU in terms of social protection. There was an opportunity. I ask the Minister not to tell us there was no alternative. There was. It was costed and documents were printed by different parties — the Labour Party, Fine Gael and Sinn Féin. The Minister cannot use the Bill to try to extend the nonsense that was spoken during the budget. There was an alternative. We can make arrangements for after Christmas if required. When the Minister’s colleague, the Minister for Finance, says the worst is over, what he is really trying to say is that we are going back to the old game all over again. The old game is over. Our function on the social welfare Bill is to make the case for the poorest people and make sure they are not the ones who carry the burden. That is why I wish we were not only on section 4. We must get on to all the other sections which deal with appliances and so on — all the basic things that people need to live decently, which are being attacked in this Bill.

Deputy Denis Naughten: There Minister said there are no alternatives, but there are. Fifty percent of the McCarthy recommendations were implemented in the Department of Social and Family Affairs, but only half that number were implemented in other Departments. Thus, there was ample room for savings. Only €55 million was achieved through taxes on the rich, one twelfth of what Fine Gael had proposed. In regard to the widow about whom the Minister spoke, how much better off will that woman be if she works for 18 hours per week? What is the shortfall in regard to fraud this year? Is it not the case that the shortfall is in excess of the €108 million the Minister will raise from the cuts being imposed on the most vulnerable in society?

Deputy Aengus Ó Snodaigh: This is the key section because it deals with the rates for social assistance payments and it covers a wide range of issues. The Minister said she had been in contact with the disability groups. I do not know if she had the time since the Budget Statement to read what Inclusion Ireland said in regard to the cuts. It stated that it regards cuts to people on disability allowance and carer’s allowances as an attack on the direct living standards and the quality of life of people with disability and that it is also at variance with the national disability strategy — which is often spoken about by the Government as evidence of its commitment to people with disabilities — and that the moratorium on recruitment and other cuts in the health care budget will impact directly on the services people with disabilities can expect to receive. It further stated that in addition, cuts to agencies which protect people with disability and prevent them from being discriminated against on the grounds of disability, such as the Equality Tribunal and the Health and Information Quality Authority, will further disadvantage people with disability.

…Deputy Mary Hanafin: A number of issues have been raised and there is no point in just talking about the overall economic position when we are dealing with specifics. Structural change had to be brought about, which meant expenditure had to be reduced, and that would have a bearing next year and the year after. It is not just a simple case of bringing all this in with revenue. We had to reduce expenditure across Departments. This is about opportunities and security, and it concerns giving those young people hope for the future. There will not be jobs, opportunity or security for those young people unless we get this country’s finances right. That is what we are endeavouring to do in this budget, although we appreciate the difficulties that has caused for the significant number of people who will feel its impact. Deputy Kathleen Lynch has a genuine interest in many different issues surrounding disability and all welfare recipients. I respect that. The idea of giving more people secondary benefits is curious when there is much evidence showing that secondary benefits cause people who might be in a position to get off welfare not to want to get off it. Nobody will say that the rates will keep people on welfare but when welfare recipients know they can get household benefits, free travel, rent supplement and mortgage interest supplement they can become trapped. I am not sure that extending secondary benefits to more people will help them to break aware from the welfare system, although it will assist financially. On the other hand, a person could be on the widow’s contributory pension and be able to work anyway. I fully appreciate the issues involved for widows. We are going back around the houses with the other issues brought up. Deputy Tom Sheahan asked about contingency. The figures for the Department were worked out on the basis of 460,000 people unemployed on average. On the one hand we are anticipating that, unfortunately, approximately 70,000 more people will lose their jobs but all the evidence indicates that the live register has stabilised. We were in a horrific position last January when 1,000 people per day were losing their jobs. I am sure Deputy Sheahan will be well able to ask his own questions. Fortunately the position has now stabilised because that was an horrific position for everybody involved. The average figure for next year has been revised downwards. It is anticipated that if growth returns to the country in the second half of next year, employment will be a bit slower to follow. Notwithstanding the cuts being made in the budget, there is an additional allowance of €676 million in this Department. God forbid, if there should be any increased demand, the budget will have to grow because these are demand-led schemes. That is our best estimate.

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