: My colleague, Deputy O'Hanlon, dealt fairly comprehensively with the detailed aspects of this Bill. Consequently I shall confine my remarks at present to some fairly general comments.
I was asked to speak immediately after the Budget Statement in this House. My initial reaction was — and the words I used at the time were — that it was a savage budget especially in relation to the poor and social welfare recipients.
Having looked specifically at this Social Welfare Bill I feel that the comments of some Labour Deputies in relation to it — Deputy Bell in particular — only echo the reality that is part of this Bill. The Minister was quoted as suggesting that this was a Bill to deal with spongers in our society. Those were the headlines in the papers the evening it was introduced, that this Bill would deal with spongers. It is important to make quite clear that this Bill deals principally with the withdrawal of benefits from people at present enjoying them, with a reduction in the real value of their benefits and also in their present nominal values. This Bill has nothing to do with spongers directly. One small section has some relationship to spongers in so far as it contains amendments relating to prosecutions. It is in that respect only that the Bill deals with spongers. Of course spongers were being dealt with separately in other critical studies carried out last year and from which fairly good results emerged during the year which I trust will continue. It is important therefore that we recognise that that aspect is currently being and will continue to be dealt with separately.
I had a question for written reply, number 811, on 26 January last, seeking the number of social welfare claimants reported as being capable of work following examination by a medical referee. The numbers concerned were given in the form of a table for the four quarters of last year. In so far as the assessments of medical referees are correct, these refer to people who are sponging on the social welfare system. For the first quarter the number was 2,178, the next quarter 2,393, the third quarter, 2,544 and the last quarter 2,811. These constitute effective administrative measures such as the appointment of additional medical referees and other administrative steps taken to deal specifically with those kinds of cases.
There were other measures taken also. I am sure the present Minister is continuing to deal administratively with those aspects. If one were to accept that definition of a sponger, then a man who pays insurance becomes a sponger when he draws it in his hour of need. That is something that has been suggested by various people both inside and outside the House in the course of this debate. That is a totally false definition of a sponger under our social welfare code.
This Bill does deal with disincentives and anomalies not the fault of the basic contributor. Rather are they the fault of changing times, the fault of the Government in taking more PRSI contributions from the working man and more tax from him so that his net take-home pay is considerably reduced. Certainly there was a need for adjustment here. That is also why the critical studies, to which the Minister of State referred, were undertaken last year. Those studies having been undertaken it is our view that the present Government have over-reacted to them, have not dealt with them in the way they should. The reason we oppose this Bill is that there is a very significant difference between it and our Bill. The measures we were taking were designed to meet the requirement of eliminating a disincentive to work but certainly not to over-react in this regard. If one examines some of the provisions of this Bill in comparison with those we were proposing one finds there are in fact substantial differences. The media have grasped the fact that there are differences but not their full significance. They are inclined to maintain that — yes there were differences but not of any great magnitude.
I should like to mention one or two of these differences. First, this Bill must be viewed in the overall context of what the Government are attempting to do. What we were endeavouring to do was in a specific context. Therefore the Bill must be viewed in that context. The increase for old age pensioners and widows is less than we had planned. Here the increase is 12 per cent, its implementation delayed until later in the year, which effectively represents approximately an 8 per cent increase and consequently considerably less than the 15 per cent we would have considered necessary.
Secondly disincentives and anomalies are being removed but removed excessively. The present Government have gone much further in this regard. In addition some new measures were taken which did not form part of those critical studies or were not necessary to eliminate this disincentive to work. For instance, there is the extension from 12 to 18 days waiting period for pay-related benefit for every single worker paying PRSI. I am surprised that people have not recognised the evil involved in this change, a scandalous change with regard to the working man. Is the Minister suggesting that this man, genuinely sick and out of work, is a sponger, that he needs some other special incentive? In effect what the Minister is saying is that such person will have to wait until the fourth week of illness before receiving pay-related benefit. I cannot see what reason the Minister can have for that provision and, if he has good reason, I shall be interested to hear so. I can see no reason for the Minister introducing this adverse change for the ordinary bona fide working man who is paying his full pay-related contributions, not alone now but has probably done so for many years past.
One may well ask why is the Minister changing his circumstances so adversely. It must be remembered that the members of the public service will receive their benefit from the first day of sickness. We are all aware that the first three days of sickness for a full rate PRSI payer are not covered. We are all aware also that at present one must wait 12 days for the pay-related benefit. The Minister is now pushing that back a further week, saying that a beneficiary must wait 18 days. It must be remembered that that worker must meet his mortgage payments, he must look after his wife and children, he must cater for the family shopping, pay value-added tax and so on. This is a scandalous measure introduced for the sole reason of taking money from the social welfare recipient. It is not part of any scheme to do away with anomalies or disincentives.
Putting the implementation date for these increases back to July is another way of saving some money. Of course this means that the real rate of increase is reduced considerably. I asked a parliamentary question in this respect and discovered that the amount of money saved by the Minister for Finance — or if you like taken by the Minister from beneficiaries through this delaying tactic — amounts to £39.3 million. In that figure he is taking from the old age pensioner £15.5 million. That is the sort of money the Minister is saving by delaying that implementation date. That was not any part of our plan and I am anxious to make that clear.
We are all aware that it is not intended to provide any improvement in children's allowances. There are some marvellous economists on the Government side of the House who can make great statements about every economic issue that arises but surely they realise that the decision not to grant an increase in those allowances effectively means a reduction in the value of them to the families concerned. It is a clawing back of money from those families. It has also been decided not to give a double week payment in September or December, a scheme which was introduced by Fianna Fáil and which proved of great help to those in receipt of unemployment or long-term benefits. The payment helped at the beginning of the school year and over the Christmas period. It did not cost much — about £5 million this year — and it was not part of our plans to do away with it.
Deputy Calleary referred to the dole for farmers living on small holdings. Effectively that could be described as a subsidy for those living in disadvantaged areas. It proved of great benefit to many farmers but it is being hit also by the Minister. I notice that the Minister has not increased the domiciliary care allowance. That allowance has to be treated separately or it will not be included automatically in the provisions covered globally by the Minister. At this late stage the Minister should reconsider this and provide for an increase, like last year, for those who look after handicapped children and others at home. They deserve an increase notwithstanding all the difficulties we are told the country is facing. Surely the Government can find it in their hearts to grant an increase to those people. There is not much money involved. It should be remembered that when we took office last year those people were not in line for an increase but we altered that situation.
We have heard a lot of talk about all the money that will be spent on social welfare this year and one could be led into thinking that those in receipt of those benefits will do very well. It is worth referring to the rates that will be paid this year. An old age contributory pensioner, under 80, receives £40.25 and there will be an increase of £4.85. The widow's contributory pension is only £36.25 per week despite the fact that for the last three years we gave a 25 per cent annual increase. The basic level of unemployment benefit is £31.65 for a single person and that is to be increased by £3.15. Unemployment assistance for a single person is only £26.25 per week and that person will get the glorious increase of £2.65 to manage in the coming year. It is important that we keep those increases in mind. Percentages can be misleading. It is easy for a person on £20,000 per year to talk about percentages because one is dealing with a huge sum of money. When one refers to percentage increases for those in receipt of social welfare benefits they can be misleading in regard to what will happen to those beneficiaries. They are in the unfortunate situation that the Government do not have any solution to their problem.
We appreciate that the Government have difficult problems to deal with but their policies have led to an exacerbation of them. The Minister told the House that an extra £31 million will be allocated for the unemployed. It is important to understand what the Minister for Finance was planning in his budget. He was planning to have more unemployed and there is no doubt that the Government's approach to the economy will result in more unemployment. That is why the extra £31 million has been provided for. It is part of the Government's plan. If it is the intention of the Government to plan for unemployment I am sure that in present circumstances they will not have any difficulty getting it.
The Minister of State mentioned that critical studies were being done in regard to short-time working. That was one of the areas of disincentive which, with the passage of time, had to be dealt with. The question is how far do we go in dealing with it. Since the Minister is reducing the pay-related benefit to 25 per cent, the three days, plus two days plus the 25 per cent would be a reasonable compromise leaving a reasonable incentive to work. Fianna Fáil were dealing with those measures in principle but the Bill contains the specific provisions of the Government and that Bill was prepared by the Government. The Minister should reconsider his decision in regard to those on short-time working.
By deciding to step back from 12 to 18 days for sickness or unemployment benefit the Minister will save £6 million. The critical studies in regard to the reduction in pay-related benefit indicated that a reduction from 40 to 30 per cent was appropriate but the Government have reduced it further to 25 per cent. That is another example of an excessive step being taken by the Government. That decision will save the Minister £9.4 million. The decision by the Minister to put the date back to 1 July will also result in a saving of £39.3 million. The Minister has not provided for the double week in September or December and that will mean a saving of £5 million. Leaving out that saving because it may be introduced later in the year, the Minister will save a total of £60 million. That amounts to saying that the Government will be harsher than Fianna Fáil had proposed to be to the tune of £60 million.
The Taoiseach has told the country that the Government have had great success in getting devaluation but the one person who will suffer as a result of such a move without any way of cutting back is the social welfare recipient. The Minister has told the House that social welfare benefits will cost £1,780 million but that figure is now worth 4 per cent less to the recipients as a result of devaluation. In effect, a total of £70 million has been wiped off the value of that sum overnight. The Taoiseach may express great glee about his achievements in Brussels but the social welfare beneficiaries will not be very happy about them. Even if the Taoiseach states that the impact on CPI will be about 2 per cent, that, in effect, will mean the wiping off of £35 million in terms of the purchasing power of those people. That is a severe blow to the old age pensioners, the widows and those who the Minister said may benefit later when the books are checked if things are right. If the Minister was maintaining the position of those people it would not be too bad but he is reducing their position; he is subjecting them to poverty. That is a positive move by the Government and we will have clear indications of that later when the reality of the situation is brought home to people. These are difficult times when difficult things must be done but, notwithstanding that fact, we must ensure that the real value of pensions is maintained and protected against the worst effects of the economic recession.
Then we have the gross obscenity of a £10 charge per job application in the public service. The Government may be about to do a U-Turn on this ill-conceived measure which will cause hardship to many people. Some families have, perhaps, five people unemployed and it could cost them hundreds of pounds to apply for vacancies. It would be quite impossible for many of them to apply for civil service jobs. The Government are now trying to blame civil servants, saying that this was a mistake made by them. I listened to the RTE programme This Week during which the Minister for the Public Service explained all the good reasons for this measure. As far as the poor, the unemployed and social welfare recipients are concerned, this is a bad measure which can only help to keep them in that state.
We had a statement from the Minister to the effect that £5 million would be provided for family income supplement. We know they are doing away with the double week and the effect is that those on the lowest level of social welfare are losing £5 million while those on the lowest income levels are to benefit to the extent of £5 million when a system has been worked out. That problem has yet to be resolved and we must wait to hear what will be done. It is a bit like the £9.60 which was to come out of one pocket and go into another.
Another proposal concerns the establishment of a poverty agency. The Government have done away with the National Community Development Agency for which we had allocated £2.25 million. The Act establishing this body was passed by the Oireachtas last year and enables the Government to effect any changes they may wish to make in this body. It is difficult to understand why the Government do not get on with the job of tackling poverty when the measures already exist. Existing legislation would enable the Government to appoint people to a broadly-based committee. It is a sad reflection on the Government that they should choose to set this aside. The measures exist in legislation to enable the Government to adjust and adapt the agency as they require and to appoint people who they believe could make a special contribution. Instead they have decided to establish a poverty agency. The Taoiseach will probably try to get something done in a hurry but the Bill will have to go through both Houses. If he is genuinely interested in tackling poverty, all the necessary instruments already exist.
I now refer to the statement of the Minister for Finance that budget improvements in social welfare payments will amount to £80.6 million. When one examines the budget figures one sees that the allocation published in the 1983 Estimates was £920.826 million and the revised allocation is £941.326 million, the difference being £20.5 million. In addition we know that £31 million has been taken for unemployment so the net situation is a reduction of £10 million. This is a case of money going from one pocket to the other. It is being taken from the pockets of the PRSI subscribers, above what was proposed by Fianna Fáil.
When one looks at the budget in the context of the economic strategy generally, one sees that this Bill will result in the systematic deprivation of the aged, the handicapped and the unemployed. The rate of VAT is being increased by 5 per cent, fuel is being increased by 5 per cent, inflation will rise by at least 5 per cent, PRSI is increased by 1 per cent and then there is a devaluation of 4 per cent. There is no investment in jobs and no maintenance of tax allowances. The impact will be much more severe than people realise.
Then we have the verbal socialists. This is part of the PR lie. They have captured the poverty propaganda and the poverty lobby. They say "Live horse and you will get grass". They are copying their good friend Margaret Thatcher in her policy in that respect. Before the election they sold a lie to the nation and misled the electorate. That is why I readily recognise Deputy Bell's dilemma. He is a decent man. He believed the propaganda of Fine Gael and the smoked salmon element of the Labour Party. He told the electorate that Garret was more compassionate, as the Taoiseach himself said. He said that Labour in Coalition would ensure that social welfare payments would be maintained. The stark reality of the Coalition was, however, more than he could stomach.
The once-proud Labour Party have been led astray by a succession of these pseudo-intellectuals. I would appeal to the decent members of Labour to allow the Minister for the Environment and the Minister for Social Welfare to join Fine Gael and I urge them to get back to protecting the workers and the unprotected. I tell the Labour Party that this will not work. They should get out now before it is too late. The Fianna Fáil Party stood their ground and fought the challenge of the media and the manipulations of the multi-nationals and they emerged stronger for it. The Labour Party should remember their proud heritage and not give in to the temptations of Fine Gael just because they do not happen to like us. They should not renege on the workers whom they and we in Fianna Fáil represent or truly their party's anthem will become one which is often echoed around the country: "The working class can kiss my ass, I've got the foreman's job at last".