: I should like to deal with a number of points raised. A number of Deputies referred to the non-payment of social insurance contributions. Deputy Mac Giolla thought that if we had the £25 million which is owed in arrears in PRSI contributions from employers we could immediately pay the increases from April. If one had £25 million one could pay the increases from the beginning of May. If it was paid from April it would cost about £39 million.
We should keep that figure of £25 million in perspective. I am not attempting to minimise the seriousness and the unlawfulness of the non-transfer of PRSI contributions by any employer, no matter what the circumstances might be, but I should refer to that £25 million in some detail. I originally mentioned it in the introduction of this Bill at the beginning of Second Stage. The £25 million is outstanding in respect of the 1981-1982 contribution year, but one must remember that there was a total liability of £600 million in that year by employers. The exact figure is £599.5 million PRSI liability. I indicated that 4 per cent of that was outstanding, a sum of £25 million, and that is the correct perspective. We must remember that that 4 per cent in cash terms involves about 10,000 out of 86,000 employers. That is a small sum of money spread over a large number of employers. One might ask why are we not going after these payments. Follow-up action is being taken to recover that outstanding amount but £7.5 million out of that £25 million is under various forms of statutory and management control by the Revenue Commissioners. For example, about £2.5 million is being queried by employers as to the precise amount they owe in respect of PRSI. It is not unusual, when one is dealing with payrolls and a total liability of £599.5 million, that there would be a fraction under dispute.
Another £2.2 million is being paid by instalments. It is not a major amount but it shows the kind of control which exists. Another £1.7 million out of £599.6 million is under liquidation proceedings, and about £1 million out of the £7.5 million which the Revenue Commissioners were involved in is unidentifiable in precise forms of liability.
Deputy Mac Giolla said that this is worker's money. It is, without question. Employers themselves have a liability twice that of employees. They must pay over 11.5 per cent of their pay and that calculation frequently gives rise to a degree of dispute. I have accounted for £7.5 million out of £25 million. The remaining £17.5 million is under collection in the normal way and it can be assumed without question that the bulk of it will be collected. I am talking about 1981-82 and this is the beginning of 1983. If I might give comparisons, you may ask what happened last year. For comparison purposes for previous year, the position in regard to 1980-81 is that it is down to £13.7 million outstanding of which £6 million is under various forms of control and in respect of 1979-80 the amount is right down to £6 million.
Anybody can say glibly £6 million, £13 million and £25 million and there are your social welfare increases. It is not as simple as that. Whether it is collection of social welfare insurance, PAYE, or contributions from trade union members, the same problems arise in terms of returns from branches, returns from any section of the community, contributions. I give all that by way of explanation because there is no let-up whatever on the Department of Social Welfare's part or on the part of the Revenue Commissioners in their determination to bring in all outstanding moneys. In that regard the Department of Finance would not permit any sluggishness in the collection process. Perhaps I am tempting fortune here in trying to quote from memory, but I remember that Deputy Woods estimated that he would bring in in 1981 or 1982 about £565 million in PRSI. At the year end he had brought in £563 million. He was within £2 million of the anticipated yield and that at a time of recession where employment is oscillating and proper forecasts of yields from taxation are very difficult. In that situation the Department of Social Welfare are to be commended on the precision with which they can estimate yields.
Deputy O'Hanlon has made a point which is not contested in any way by me or by my colleague, Minister of State O'Brien. It is true that the levels of increase just keep pace with inflation and I do not deny that, but we pose to this House the very serious problem that if one wants a 15 per cent increase from 1 April for 200,000 people out of work and for the other 800,000 people who are dependent on social welfare, the cost is simply £165 million in nine months and in a full year £217.5 million. That is the equivalent of virtually all of the income tax collected this year. If the current social welfare increase of 10 to 12 per cent were to be paid from 1 April the cost would be £39.6 million.
Therefore, the question arises, where is the money to come from? It is not sufficient at this stage, when the Government have made provision to bring in £70 million in capital taxation. I believe that we should bring in very much more but we are bringing in £70 million this year in capital taxation which was permissible only in the context of coming into office in mid-December, getting a budget together by the end of January with a bare few weeks to do so and bringing in money from a bank levy of £25 million, from development levies of £10 million, from residential properties of £10 million, £14 million from capital acquisitions tax and capital gains tax and another £1.5 million from derelict sites and so on, giving a total of £70 million. It is not possible in six or eight weeks to devise a new capital taxation structure, because generally speaking no work has been done in that direction.
Many Deputies have very many excellent, progressive, egalitarian ideas and many of us have no more than ideas. We pretend that we have more than we have in terms of our capacity to contribute. Most of us are not aware because we have not spent the time, we have not the back-up research to that extent either in or out of government. As a result we have the greatest of difficulty in devising measures of revenue on an equitable basis. Then we are back to a situation where in a budget to provide for social welfare increases we increased the income tax level to the 65 per cent rate which brings in only £8 million or £9 million which is very little. We have increased the level of liability for PRSI contributions from £9,500 to £13,000. This brings in only an extra £16 million, which is peanuts in terms of social welfare. That £16 million is only a miserable 1 per cent increase.
The Opposition and the Government, irrespective of political persuasion and alleged idelogies—very often it is difficult to segment out precisely the ideology which is talked about from time to time—represent a country which is an ideology of sectional interests rather than political ideologies in terms of social and taxation perceptions. It is very difficult in that context to perceive in a Social Welfare Bill, wherein we are spending £80.6 million on a 10 to 12 per cent increase and providing £31 million more for the cost of additional unemployment, how better one could produce money to pay for the increases.
Without any difficulty we could have increased the rates of PRSI. An extra 1.5 per cent on the existing rates would have brought in £45 million to £46 million. That would provide the increase from 1 April but, as I have said, the then reciprocal execration on the head of the Government for increasing PRSI would follow. Everybody at work would then rebound on the Government and say, "There we go again, more increases". As it was, we had to put a 1 per cent increase on wage levels generally trying to ensure some kind of balance of the budget. We worked out with a budget deficit of £890 million. God forbid what would have happened to social welfare if we had a budget deficit of £750 million as The Way Forward clearly proposed and tabulated. The deflationary impact of VAT would have meant no increase at all in social welfare in 1983. It was cleverly cloaked. The Way Forward on page 18 under “Public Finances” said that the current budget deficit as a percentage of GNP in 1983 would be 5.5 per cent. That figure represents a budget deficit of £750 million. They did not put down the figure. In 1982 the outturn was 7.5 per cent, £900 million. It is only when one reads through documents, particularly those prepared and carefully cloaked as was done in the document dealing with pay-related benefits for short-time workers, that it dawns on one what the true impact will be.
My colleagues and I were faced with an increase in the social welfare provision this year, but it is by no means a real increase. I am acutely aware of the current rate of unemployment assistance paid to a married man with a wife and two children. At the end of June he will get £65.15, an appalingly low income to expect any family to live on. It is only 42 per cent of current earnings. In the transportable goods industry male adults earn approximately £155 per week. I have never had to live on £65 a week and would be horrified at the prospect of having to do so, although I had to live on a Deputy's salary since 1969 and at times that was precarious enough. The plight of these men who get £65 a week is desperate, but we as a community must deal with that poverty situation and with that of workers on exceptionally low incomes. It is expected that there will be intensive discussions within the Government on these matters within the next eight or nine months.
The other day I was talking to a young girl of 19 or 20 years who works in a cake shop for £30 a week. She is being exploited. I know of married men with two or three children who are getting £100, less tax, PRSI and so on. Because of their deductions they are almost down to the medical card income level. That is why we need our family income supplement scheme. This will help those who are working but with low incomes. We must ensure that this scheme is not used by employers to get cheap labour. This scheme has to be very carefully worked out so that it will not do the reverse of what was intended. We must carry out a thorough examination of income and taxation levels as well as transfer payments. We have never carried out such an examination.
The more I examine the thousands of pounds we spend on social welfare and the £90 million we spend on the general medical services, the more critical I am of successive Governments for their failure down the years to come to grips with social deprivation and poverty and to use properly our existing resources. I am convinced that if we never raised another penny from taxation or PRSI, out of the money we are already spending on social welfare, health and education, we could have a society which would be more just and equitable because people in real need would be getting the money rather than the current patchwork quilt of transfer payments from one section of the community to another. I make that point because it relates to the section dealing with unemployment assistance. All the money for unemployment assistance comes from the taxpayers' pockets; not a penny is collected by way of PRSI.
