I move amendment No. 1:
In page 3, between lines 11 and 12, to insert the following:
2.–The Minister shall as soon as may be after the passing of this Act prepare and lay before both Houses of the Oireachtas a report on the implications of increasing child benefit, pensions and other social welfare payments in line with previously stated Government policy commitments, including the National Anti-Poverty Strategy and the Programme for Government.
We indicated on Second and Committee Stages our unhappiness about some of the increases in social welfare benefits. People claim the Minister looked after the pensioners with a €10 increase but she must realise that a significant amount of this will be eaten away by inflation.
The Minister explained that the 4.8% was predicated on a levelling of inflation over a period of a year but already the indications from some of the leading financial houses in town, whose business is to get predictions on inflation right, are that the January rate of inflation could be 6% or more. There is, therefore, a significant erosion of the income of our most vulnerable people. They also have greater dependence on heating and other basic services and do not have the same options as people who are more mobile and so forth. This is particularly so in rural areas, where the free travel pass is not much use because people do not have access to transport. Immobility in rural areas is a huge problem. In many cases the €10 could be eaten up by the price of a taxi to bring the person into town to collect their pension.
The Minister indicated that a €1 increase would cost a significant amount of money. I have forgotten the figure – the Minister will probably mention it again – but I was taken aback by the amount. However, we contended that there are ancillary elements in the free schemes which would be of benefit to these people. In particular, we advocated a voucher system that would allow people in rural areas to avail of a taxi and other transport services in those areas. The Government has allocated €500,000 to the rural transport initiative, which I applaud. It should be the first of many steps to try to help people in these areas. For many elderly people in rural areas receipt of the free travel pass might be the first contact they have with the Department of Social and Family Affairs. However, for many it also gathers dust as it lies behind a photograph on the mantelpiece or in a drawer. It is of no use where there is no public transport available, be it buses or trains. We are seeking a report in this area to examine if there is a possibility of widening some of these schemes so they can be made more useful to people in these circumstances.
Over the coming months the Combat Poverty Agency's recent publication, "Against all odds, Family Life on a Low Income in Ireland", will be studied by everybody. The social and family affairs committee will look at it and, no doubt, many Members will wish to contribute to that debate. I am sure the Minister for Finance and the Minister for Social and Family Affairs will also look at it. The report deals with the lives of people living on social welfare payments. Often people who are on the left of the political spectrum, and I see many such colleagues in the Chamber tonight, are described as being part of the poverty lobby, pinkos, left pinkos or other such names. Some people would call them derogatory terms but to me they are terms of endearment because we look after a group of people who need a voice to articulate their views. We are not afraid to do that.
The Combat Poverty Agency shows that a significant number of people have not benefited or made gains from the wealth created during the past six or seven years. The Minister has provided €6 to bring the lowest social welfare payment to €124.80 but that falls short of the PPF commitment to bring the payment to €127 during that period. The Minister has argued that the increase is more than inflation but that does not take account of the fact that people on lower incomes face higher than average costs due to their lower purchasing power and lack of private transport. These factors must be taken into account.
The Minister also made changes to the rent supplements and the discretion of the health boards, superintendent community welfare officers and community welfare officers to deal with rent supplements. She used secondary legislation, that is, statutory instrument, to do this. I believe there is a flaw in the secondary legislation and that it should be examined in the context of the primary legislation, section 266 of the Social Welfare (Consolidation) Act, 1993, to ensure it is not ultra vires. In any event, about €4.80 of that €6 will be clawed back immediately because of the increase in the basic rate of contribution. In fairness, the Minister said the reason for that is that it is 10% of the basic rate of social welfare that is now applicable. However, it will reduce people on that rate to €120. When one adds the 1% increase in VAT, it is a wipe out. Many of the Minister's colleagues dismissed us during the debate on the budget and said we were using crazy economics. However, that is where Fr. Seán Healy and CORI got their figure of 25 cent per week. One does not need to be a rocket scientist or a great economist to arrive at that figure, particularly if people are in rented accommodation.
The greatest fear about that provision is that it will hit single people hardest and increase the level of homelessness, which is running at about 6,000 throughout the country. It exists in rural areas as well as urban areas. These changes must be combined with a 30% increase in electricity charges. Many pensioners and people in social welfare schemes will have free electricity units but that only applies to a certain level. Any usage above that attracts the increase which will eat into one's income.
A significant number of the changes and increases made by the Minister will be clawed back. People will be left in either a static situation or poorer. With regard to child benefit, the Minister said it is a start. Child benefit is advocated by all agencies as the means of ensuring the mother receives the money and uses it. That is one of the reasons the Minister said it would not be means tested. I can understand the Minister's attitude in that regard. Nevertheless, a commitment was given and many people felt disappointed and short changed when it was not delivered. I agree with the Minister that it is an effective way of supporting children and does not contribute to disincentives or poverty traps. It is targeted and focused. Barnardos, the Children's Alliance and the community platform have advocated it as an important means of supporting children, especially in a context where the child dependant allowance has remained static for the past ten years.
Widows and widowers under 66 feel hard done by and have complained bitterly that there is no increase in this area as many of them have a young person going to college.
I am surprised by the volume of correspondence I have already received in the short time since I became Labour Party spokesperson on social and family affairs. People are much aggrieved at the post-budget situation which has had a big impact in real terms. We have to focus on this area in future. Unfortunately, we are precluded from making any proposals that would cost the Minister money.
The NAPS report and the Goodbody review exist, as do many others, but they need to be acted on. The income adequacy group proposed that formal links be established between the adult welfare rates and average earnings. If this had been accepted it would have protected the income of social welfare recipients. I am aware that there are two views on the NAPS report. If one wishes to build an inclusive society, as the Government claims it does, then such a step must be taken. Smoke and mirrors were evident in the poverty-proofing test applied to the budget by the Department of Finance.
The budget was characterised by highly regressive indirect tax increases such as VAT and excise duties. These have the greatest impact on the poor. When all the budgetary implications are calculated the poor will not be smiling in 2003.