Dáil Éireann debate -
Wednesday, 8 Mar 1978

Vol. 304 No. 7

Social Welfare Bill, 1978: Committee Stage (Resumed) and Final Stages.

Question again proposed: "That section 17 stand part of the Bill."

Mr. Boland

There is not much point in delaying the House unnecessarily. Our main objection to this section was outlined in detail by me yesterday during my Second Stage speech. We object to the concept that the increases being levied both on employees and employers are double last year's increases and this is happening at a time when employees and their unions are being asked to accept moderation in the proposed wage agreement and employers are being urged to take on extra staff. The point was made that a firm employing 100 extra people would find that their bill for social welfare contributions would amount to an extra £5,000 a year.

Objection was also raised to the concept of reducing by £1 per week the social welfare contributions for employees earning less than £50 a week from January and taking back 28p of that reduction from the beginning of April. I felt that was deceitful and represented a sleight of hand and was not a proper approach. I do not accept the Minister's earlier explanation that part of the reason for the increase in the stamp was to finance social welfare increases which came into effect last autumn. Every Government do their housekeeping and make up their accounts at the end of the financial year, assess how much they will need for the following year and introduce their budget accordingly. When the budget is introduced the methods of paying for the moneys to be spent in one form or another should be outlined.

On the Health Contributions Bill last week I said that when one asks people what they think of a budget which appears to have distributed largesse without looking for additional taxation their reaction usually is, "I do not know how they are going to do it but they are going to take it from you some way". I said that that Bill was one of the ways they were going to take this money but I did not think that less than one week later I would be standing up and saying that this was another and major way in which the Government intend financing their budget. If increases like this are being announced it should be done in the budget.

Minister for Social Welfare (Mr. Haughey)

I am sorry Deputy Boland does not appear to understand the section. Rates generally were increased last October by 5 per cent. Nothing was provided in the 1977 budget for those increases nor in the stamp which was also increased in 1977 to cope with those increases. I am now proposing an increase of £1.50 in the normal rate. Of that amount 52p, a straightforward clear-cut definite 52p, is mainly attributable to the increases made in rates last October—35p for the employer and 17p for the employee. The Deputy can check that with the Comptroller and Auditor General if he likes, but that is the position.

The only other factor of interest in regard to these increases is that this year the Exchequer is contributing 22 per cent of the overall cost of our social insurance services as against 17 per cent last year, or you could say as against 19 per cent last year. There is a very considerable increase in the contribution which the Exchequer is making to the overall cost of the social welfare services this year. That is not the end of the story. So far as the lower paid worker is concerned we are making a further concession. The stamp should be increased by £1.50 but we are not permitting it to go up the full amount. We are lopping off 50p and increasing the stamp by only £1. Of that 50p saving, 34p goes to the employer and 16p goes to the employee in accordance with normal practice. In addition to the £1 reduction in the stamp of the lower paid worker there is now a further 16p reduction. This means he is now enjoying 116p mitigation of the rate of stamp payable. These are facts I would like the House to bear in mind. They are not arguments; they are simply a straightforward statement of fact.

Deputy Boland should realise that what we are doing here has been done for decades. The statutory system is that benefits are increased. The rate of stamp necessary to pay for those benefits is calculated having regard to the amount the Exchequer is contributing and that new rate is then brought into being each year by legislation. That is what we are doing here. Frankly I think Deputy Boland is just being silly in opposing this increase in the stamp. He is saying to the people that the increases made last October should not have been made, or if they were made they should not be paid for. He is also saying that the increases granted in this year's budget should not have been granted, or if they were granted they should not be paid for. There is nothing magic about what we are doing here. It is a simple, straightforward calculation based on the statutory requirements of the social welfare system.

Mr. Boland

The Minister is using contorted logic. First, we are not doing the same thing that was done every other year. In 1976 the Minister and his colleagues complained bitterly because the social welfare and health increases were not announced by the Minister for Finance in the budget speech. As a result, the increases for 1977 were outlined during the budget speech, and I am saying that should have been done this year. If the criticism was good in 1976 it is equally valid now. I do not accept that part of the cost of the increases should be thrown back to last autumn. The increases last autumn came about as an adjustment to keep social welfare beneficiaries in line with the increased cost of living and the Minister, in using that as an excuse, appears to be inclined to suggest that the autumn increases should not have been honoured by his Government.

I am suggesting that in a year when inflation is falling, when it is hoped to bring it to single figures, when employers are being encouraged to employ more workers and workers are being urged to use moderation in pay claims, this is the year when the Government should take on a larger share of the cost so as not to upset employers or employees who are being asked to bear double the increase they bore last year when inflation and wage increases were higher.

There is a fundamental disagreement between us on this. This is the wrong way to do it. If there are to be increases they should be announced at the time of the budget and they should bear some relation to the expected rise in the cost of living. These do not, and for that reason I am opposed to them and to the manner in which they are being announced. There is not much point in continuing this discussion. The Minister has been very patient. He was not well last week and the House ought to thank him for his presence today to ensure that the Bill will be discussed and implemented. However, we must register our fundamental disagreement on this matter.

Question put.

The Committee divided: Tá, 69; Níl, 48.

Tá

• Ahern, Bertie.
• Ahern, Kit.
• Allen, Lorcan.
• Andrews, Niall.
• Aylward, Liam.
• Brady, Gerard.
• Brady, Vincent.
• Briscoe, Ben.
• Brosnan, Seán.
• Browne, Seán.
• Callanan, John.
• Calleary, Seán.
• Cogan, Barry.
• Colley, George.
• Collins, Gerard.
• Conaghan, Hugh.
• Connolly, Gerard.
• Cowen, Bernard.
• Crinion, Brendan.
• Daly, Brendan.
• Davern, Noel.
• de Valera, Síle.
• de Valera, Vivion.
• Doherty, Seán.
• Fahey, Jackie.
• Farrell, Joe.
• Faulkner, Pádraig.
• Fitzgerald, Gene.
• Fitzpatrick, Tom (Dublin South-Central).
• Fitzsimons, James N.
• Flynn, Pádraig.
• Fox, Christopher J.
• French, Seán.
• Gallagher, James.
• Gibbons, Jim.
• Haughey, Charles J.
• Hussey, Thomas.
• Keegan, Seán.
• Kenneally, William.
• Killeen, Tim.
• Lalor, Patrick J.
• Lawlor, Liam.
• Lemass, Eileen.
• Lenihan, Brian.
• Leonard, Jimmy.
• Leonard, Tom.
• Leyden, Terry.
• Lynch, Jack.
• McCreevy, Charlie.
• McEllistrim, Thomas.
• MacSharry, Ray.
• Meaney, Tom.
• Molloy, Robert.
• Moore, Seán.
• Morley, P.J.
• Murphy, Ciarán P.
• Nolan, Tom.
• Noonan, Michael.
• O'Connor, Timothy C.
• O'Hanlon, Rory.
• O'Leary, John.
• O'Malley, Desmond.
• Power, Paddy.
• Smith, Michael.
• Tunney, Jim.
• Walsh, Joe.
• Walsh, Seán.
• Wilson, John P.
• Woods, Michael J.

Níl

• Barry, Peter.
• Barry, Richard.
• Begley, Michael.
• Belton, Luke.
• Bermingham, Joseph.
• Boland, John.
• Bruton, John.
• Burke, John.
• Byrne, Hugh.
• Clinton, Mark.
• Cluskey, Frank.
• Collins, Edward.
• Conlan, John F.
• Corish, Brendan.
• Cosgrave, Michael J.
• Creed, Donal.
• Crotty, Kieran.
• D'Arcy, Michael J.
• Deasy, Martin A.
• Desmond, Barry.
• Desmond, Eileen.
• Donegan, Patrick S.
• Enright, Thomas W.
• FitzGerald, Garret.
• Fitzpatrick, Tom (Cavan-Monaghan).
• Gilhawley, Eugene.
• Griffin, Brendan.
• Harte, Patrick D.
• Horgan, John.
• Keating, Michael.
• Kelly, John.
• Kenny, Enda.
• McMahon, Larry.
• Mannion, John M.
• Mitchell, Jim.
• O'Brien, Fergus.
• O'Brien, William.
• O'Connell, John.
• O'Donnell, Tom.
• O'Keeffe, Jim.
• O'Toole, Paddy.
• Pattison, Séamus.
• Quinn, Ruairí.
• Ryan, John J.
• Taylor, Frank.
• Timmins, Godfrey.
• Treacy, Seán.
• Tully, James.

Tellers: Tá, Deputies P. Lalor and C. Murphy; Níl, Deputies B. Desmond and Creed.

Question declared carried.

Sections 18 to 23, inclusive, agreed to.

Title agreed to.

Bill reported without amendment and passed.