Although the Government has been in office for only two months and had a short time to prepare for the budget, it has gone a long way towards meeting the key objectives set out in the programme, A Government of Renewal. We made a commitment to the employment needs of all our people, especially the long term unemployed; the development of an innovative enterprising economy which meets the demands of international competition and shares the rewards of effort, initiative and success; the reform of the tax system, in particular, to relieve the tax and PRSI burden on those with low incomes and those with families and the implementation of policies to reflect a commitment to the best quality of life for our people in terms of health care, justice, housing, education and protection of children and the family.
I am particularly pleased with the direction of the tax reforms. Too often in the past Governments gave the bulk of the tax concessions to relatively high earners while little or nothing was done for the lower earners. These changes will particularly benefit low paid workers, but the raising of the personal allowances and the widening of the lower band will have a significant positive knock-on impact up the line.
The predictable criticism from Fianna Fáil and the Progressive Democrats of the inadequacy of the tax reforms rings hollow. They must believe that the public has a very short memory. The same parties came to power in 1989 promising radical tax reform but all they did was pile on the agony, especially on the PAYE sector. The Progressive Democrats Party, in particular, has managed to portray itself as the champion of tax reform but its record in office was abysmal.
The tax reforms in this budget are the most significant to have been introduced for many years but they are not by any means the end of the process. The work has begun and must now be completed in the coming years. Not all sectors are yet paying a fair share of the tax burden and there is a particular need, as the programme, A Government of Renewal states, to “continue the improvements in the collection system and strengthening the Revenue Commissioners' audit capacity in the fight against tax evasion”. I look forward to the support of the Progressive Democrats for our efforts in that regard.
A number of the reforms in the budget were introduced after lobbying by business and employer organisations. They have secured reductions in the level of employers' PRSI and a reduced corporation tax rate and it is not unreasonable now to expect that business people who sought such reforms will now deliver the extra jobs which they promised would flow from these moves. In the coming year the Government must set about monitoring and evaluating these reforms to ensure that they are effective as job creators.
The radical social welfare provisions must be seen in the context of the programme, A Government of Renewal, which commits the Government to a radical shift of income and resources in our society, to stimulating enterprise and job creation, to rewarding work in all its forms and to ensuring social solidarity between those who are better off and those who are less so.
The Department of Social Welfare has a crucial role to play in achieving these aims. Nowadays that role goes far beyond the safety-net role of seeking to ensure that everyone has a minimal income. Our objective is to ensure an adequate income and social support for everyone, an objective which has not yet been achieved. We can and must also play an increasingly pro-active role in relation to work and enterprise of all kinds, paid or unpaid, facilitate employment and experiments with employment, however atypical or unorthodox by traditional standards, and provide the real economic and social security that enables citizens to interact positively with the new forms of work emerging. We must take account of the labour market as it now is and is becoming, namely more flexible, even volatile, with many changes in the hours people work and in the type of work that is needed. We must also take account of and plan for the demographic changes that are clearly underway — falling birth rates, varying family types and more older people — and address the need for better support for people with disabilities.
The changes in the labour market must be paralleled by changes in how we deliver social welfare; greater economic flexibility and the insecurity that may create must be matched by greater social security and flexibility in our support systems. Gone are the days of hardand-fast distinctions between those who are working and those who are welfare recipients. Gone also are the days when the 40 hour working week was dominant. Most workers can expect to rely on social welfare at various times in their employment or life cycle, even before reaching pension age, and most welfare recipients hope to enter or reenter the paid workforce as opportunities arise.
Greater independence and equality for women must also be mirrored in equal rights to income support and social services that facilitate men and women in search of a balanced distribution of work and responsibility within the workforce and the family. I look forward to the day when no man or woman in our society is reluctant or afraid to take up any form of work — be it a few days well-paid freelance work, a few weeks part-time work or a few years unpaid work in the home with children — because of the fear of losing social welfare benefits or ending up worse off for their pains.
I have a twofold approach to social welfare: first, to increase social payments to a level that provides an adequate income for those who cannot provide for themselves and, second, to tackle the traps in our system which prevent people from taking up work or education and training or family responsibilities. I intend to do this in a somewhat different manner from my predecessors, for example, Deputy McCreevy who was in the Department of Social Welfare when Deputy Harney was in Government with Fianna Fáil. Rather than reducing benefits, making it more difficult for people to qualify or complicating the system with new rules each year, as Deputy McCreevy did, my objective is to minimise the obstacles by reducing the extent to which people lose basic income supports as a result of taking up employment, to simplify the system and to iron out the anomalies which arise at the various points where the tax and welfare systems operate at crosspurposes.
The integration of tax and social welfare is a concept to which I have long been committed; indeed mine was the only political party to have advocated it, in its submissions to both the Commissions on Taxation and on Social Welfare, more than a decade ago. Since then it has passed into the conventional wisdom and has begun to mean many things to many people. I am confident that the report of the expert group on this issue, due later this year, will serve to clarify many of the complex issues involved and point the way forward; I will be particularly interested in the group's views on the question of a basic income for all citizens.
In the meantime, during the life of the Government, we are committed to providing a form of basic income for children, through the creation of a child benefit supplement. This will be payable, in addition to the universal child benefit, to all families whose income is below a certain level — irrespective of whether that income is from social welfare or employment, or a combination of the two. This will provide a baseline level of support for children, and those who care for them, and will target resources effectively at those in our society who are at greatest risk of poverty — families with larger numbers of children. It will also remove one of the worst poverty and unemployment traps in the existing system, which arises from the loss of child support when a person with children takes up employment. The new child benefit supplement will incorporate the child dependant allowances paid to people on social welfare and the family income supplement payable to people on low income from employment. Having established a good basic child benefit payment this year we are now preparing for the introduction of the supplement in future budgets.
The other improvements we are introducing have their own significance and I do not wish to downplay them by over-emphasising the importance of the child benefit increase. However, child benefit accounts for some 38 per cent of total additional social welfare spending this year and almost 50 per cent of the full year cost. Even so we have succeeded in achieving many other important improvements.
We are providing a total of over £90 million for social welfare and related improvements in 1995 and £212 million on a full year cost basis. Contrary to what Deputies Ahern and Harney said, this accounts for one-third of the increased expenditure in the budget. This is a significant increase and is much more, as alleged by Deputy Harney, than a 1.5 per cent increase to social welfare recipients. These are huge amounts of money by any standards. Their size alone demonstrates this new Government's concern about poverty in our society. The way in which the resources are focused demonstrates our commitment to the priorities to which I already referred.
It is extraordinary that Deputies Ahern and Harney in one breath complain that "goodies" are being spread all over the place — one for every person in the audience — and that there is no strategy and at the same time decry the fact that a greater proportion of moneys will be spent on children and families in this social welfare budget than on other categories of social welfare recipients: they cannot have it both ways and must make up their minds.
We are also allocating £60 million for equal treatment payments this year. Of this, nearly £50 million is coming from the social insurance fund and I would like to explain, especially to Deputy McCreevy who despite having spent nine months at the Department of Social Welfare does not seem to understand it, how the social insurance fund operates.
Under the provisions of Social Welfare Acts expenditure on social insurance payments must be met from the social insurance fund. Almost all the equality payments are social insurance benefits, principally disability benefit and unemployment benefit. Therefore, the cost of these payments must be met out of the fund in line with the legal requirement. A minor element of the costs will relate to unemployment assistance and this expenditure will be met by the Exchequer, not by the social insurance fund. There is, therefore, no question of us plundering or raiding the social insurance fund as alleged by Deputy McCreevy.
There are a number of other socal welfare improvements which I have included in an appendix to my speech to save time.
On top of the other social welfare improvements a 2.5 per cent increase is being given in all weekly social welfare and health board payments. I emphasise that this increase will be paid six weeks earlier than normal this year. If anyone cares to do arithmetic they will discover that this is equivalent to an increase of 3 per cent. Paying the increase of 2.5 per cent six weeks earlier will be much more useful as people will have the money in their pockets sooner. In addition it will reduce the liability of those on unemployment benefit to tax and the possibility of pensioners living in local authority houses being exposed to increases in differential rent. Last year many pensioners approached me to highlight the fact that they had been granted an increase of £2 but that £1.60 of this was taken by the corporation by way of an increase in differential rent.
The increase which will apply to personal rates and adult dependant allowances is designed to compensate social welfare recipients for the expected increase in prices this year and thereby maintain their real income position. In so doing a major commitment in the Programme for Competitiveness and Work is being honoured. However, I am particularly pleased to be able to bring the new rates into effect from mid-June instead of the previous implementation date of late July. This move has been a long-standing demand by me in Opposition and by many organisations and individuals who were aggrieved at the timelag of up to six months between the announcement of rate increases and their implementation date. For most people the increased rates will be paid as they fall due from mid-June. However, there will be a group of people who already have order books that go beyond mid-June and clearly separate arrangements will have to be made for them to receive their increase. These people, about 260,000, will be paid the increased amount in arrears the following month.
I am personally in favour of implementing the increases as close as possible to the budget announcements, at least in line with the changes in personal taxation, to put social welfare recipients on a par with those at work. I will be pressing the question of bringing the payment date back even further in the context of next year's budget. I am asking my Department to gear itself up to changing its production schedules to facilitate this to the greatest extent possible.
Child dependant allowances will, however, be payable up to age 22, instead of age 21, for those in full-time education in the case of recipients of long term social welfare payments to ensure that young people can stay in college to further their studies.
The general increase in weekly rates is by far the most expensive single item in the social welfare budget improvements. It will cost almost £43 million this year and almost £77 million in a full year. Bringing forward the payment date by six weeks represents £9 million in 1995.
Child dependant allowances payable with all weekly social welfare and health board payments are not being increased in this budget. They are, however, being maintained at their July 1994 rate. This is consistent with their replacement by our proposed new child benefit supplement. However, the 33p increase which would have accrued for indexing them is incorporated in the £7 per month increase in child benefit. Deputy McCreevey yesterday made great play out of the fact that this is the first time child dependant allowances have been frozen, but it is also the first time that child benefit has been increased by anything like £7, which more than offsets that 33p loss.
In addition to the increase in the payments, it is also proposed from next September to pay child benefit for 18 year olds for those in full-time education, including those attending FÁS courses for which no weekly course allowance is payable. Under present arrangements, child benefit ceases to be payable when a child turns 18, irrespective of whether full-time education is being pursued. Similarly, child benefit is not currently payable to 18 year olds on FÁS courses without a weekly allowance. These improvements will be welcomed in the context of changes in the school-leaving age following the introduction of the transition year in second-level schools and also the need to rationalise entitlements where certain FÁS courses are concerned.
Because time is running out I will move on to the carer's allowance. A section dealing with PRSI is included in my speech and I ask Deputies, if they are interested, to read the text circulated. I am pleased to be able to continue the trend of previous years in progressively improving the carer's allowance which was introduced in 1990 as an income maintenance payment for those who provide full-time care and attention to social welfare pensioners and certain disabled people. This is a benefit for pensioners which Deputies Ahern, McCreevy and Harney have ignored.
This year, I propose to extend the carer's allowance to people looking after pensioners over 66 years who are in receipt of non-social welfare pensions, for example, those in receipt of occupational pensions. This is a major improvement which will bring another group of pensioners within the ambit of the allowance — those who are on relatively low pensions from employment. It will remove the distinction between people whose pensions are from social welfare and those whose pensions, though perhaps similar in money terms, are purely occupational. Many of those who benefit will be former public servants on fairly low pensions.
I am also easing yet again the means test for the carer's allowance which has always been criticised as being unduly restrictive. The earnings disregard of £100 per week announced last year is being increased to £150 per week and will apply not only to earnings from work but to all types of income such as pensions. Many people who left work and claimed pensions found they did not qualify because it referred to earned income.
The disabled persons' maintenance allowance is funded at present by the Department of Health. From later this year, responsibility for this will be transferred to my Department and an amount of £45 million is being provided in my Department's Estimate for this purpose.
The new funding arrangement is a necessary first step to my Department taking over direct responsibility for administering the scheme. It is more appropriate that it be integrated with the income maintenance services of my Department. This was recommended by the Commission on Social Welfare and in a number of other reports down the years and it is time to act on this. It will open the way to streamlining and simplifying the income maintenance provisions for sick and disabled people generally and I will be examining these provisions in the light of the forthcoming report of the Commission on the Status of People with Disabilities. My Department will be discussing immediately with the Department of Health and the health boards the implications of transferring responsibility for the scheme.
In response to the concern expressed generally about young people being forced to leave home in order to qualify for unemployment assistance, the minimum payment is now being substantially increased from £10 to £25 per week for those assessed while living at home. Again, that is significantly more than 2.5 per cent, which is being alleged by those who are picking holes in this budget. In addition, the assessment of the benefit of board and privilege while at home will, in future apply only to those living at home with their parents. This will remove many people from an assessment which has been criticised over the years as intrusive and sometimes unfair.
I believe I only have five minutes remaining to me but I would need another two hours to complete my contribution. Before concluding, I want to refer to deserted wife's benefit because some confusion has arisen from misreporting of this particular reform of the social welfare code. We propose to integrate the existing lone parent's allowance and deserted wife's benefit into a uniform scheme for parents, men or women, caring for children on their own and to abolish the requirement to prove desertion. Let me be clear about this. We are not abolishing the payment of deserted wife's benefit; we are abolishing the concept of desertion, the requirement that a woman must prove she has been deserted by her husband before she can receive the benefit. We want to remove this intrusive and judgmental rule from the system and simply provide income support to people who, for whatever reason, are raising children on their own and need financial assistance. We also intend to remove the sex discrimination from this scheme because it is a fact that some men find themselves in this situation and they, too, should be eligible for support in future. Nobody currently in receipt of deserted wife's benefit will lose out as a result of this change and people can and should continue to apply for deserted wife's benefit in the normal way until the change is introduced by legislation in this House.
At present, deserted wife's benefit begins to be reduced if the woman has earnings in excess of a certain amount of money. These earnings ceilings are higher for people on the means-tested lone parent's allowance. Our intention is that the new unified payment for people raising children on their own will not be fully means-tested but will be withdrawn gradually as the recipient achieves relatively high levels of earnings. This will be done in such a way as to avoid creating any poverty or unemployment traps for people in this situation as it is a major priority of this Government to remove such traps.
There is a range of improvements in the budget in relation to back to school clothing and footwear allowances where we have provided £5 increases. That is much more than 2.5 per cent. It is 14 per cent in regard to primary school children and 10 per cent in regard to secondary children and will assist approximately 285,000 children attending school.
The free schemes are being extended. A colour licence will now be available to all pensioners who qualified in the past for black and white television licences. A travel companion pass will be available to people who are being cared for by a recipient of the carer's allowance. The companion pass will be usable by any person travelling with the person being cared for; it is not confined to the carer. That is an important advance in the provision we make for those who are being cared for.
There is also a novel and useful extension of the free travel scheme whereby pensioners who have free travel will be enabled to travel to Northern Ireland free of charge. In the course of the next few weeks, I hope to reach agreement with my counterpart in Northern Ireland on a similar arrangement for pensioners in Northern Ireland to travel to the Republic. A sum of £200,000 has been set aside in the budget for that scheme.
There are many other budget measures relating to the aligning of pension rights, including a significant one relating to homemakers where we are increasing the age of children being cared for from six to 12 years for the purpose of men or women who leave the workforce to care for children and maintain their eligibility for pension purposes.
I must pass over the section in my speech dealing with employment. I want to refer to the students' summer jobs scheme which was one of the more significant and controversial programmes introduced by my predecessor. This programme commenced in 1993 and approximately 9,000 students now participate in it. That is an indication of its importance to both the students and the various groups who sponsor projects. The Union of Students in Ireland continue to oppose it in principle as workfare. I find workfare also to be repugnant and I am seeking ways to enhance the voluntary nature of the scheme. I intend to meet members of the USI soon to discuss with them how the increased funding now available in this budget for the scheme can be used to the best advantage of students who need assistance to remain in education.
Before concluding I wish to say that the appendices in my speech will be circulated in the Official Report for the information of Deputies. They contain a summary of all of the social welfare improvements and also some of the grants which the Department of Social Welfare has agreed to allocate.
My Department will be taking responsibility for the National Social Services Board which provides, among other things, valuable information services. I am providing £250,000 to the National Social Services Board to develop an information project — the computerisation of integrated information on social services. It is important that accurate independent information be made available to citizens which would be by way of a second opinion in relation to information they may obtain from Government Departments. This is an important development in terms of the commitment in our programme that citizens have not only the right to freedom of information but also the right of access to information at the most basic level. It is important that the NSSB will now be enabled to develop an independent information service which hopefully will also provide an advocacy service necessary for many of our citizens.
I regret I do not have sufficient time to read the remainder of my speech into the record but I thank the Deputies present for their courtesy in allowing me the extra time.
Main Features:
The main features of this year's budget are:—
—A general 2.5 per cent increase in all weekly social and health board payments, effective from mid June 1995.
—An increase of £7 in child benefit monthly payments for each child, together with an extension for 18 year olds in full time education or attending certain FÁS courses, effective from September 1995. The new rates will mean an increase from £20 to £27 a month for the first and second child and from £25 to £32 a month for the third and subsequent children.
—Child dependant allowance will continue up to age 22 years for those in full-time education.
—Changes to the PRSI system which will benefit both employers and employees.
—An extension of the carer's allowance to cover pensioners getting an occupational pension and further easing of the means test through an increase in the earnings disregard for a working spouse and an extension of the disregard to spouses' income from other sources.
—An increase of £5 for each child in the back to school clothing and footwear allowance.
—An increase from £10 to £25 in the minimum payment of unemployment assistance where board and lodgings are assessed for people living at home and the abolition of board and lodging assessment for those living other than with their parents.
—Increases in the minimum and maximum weekly payments of maternity benefit to £75.20 and £162.80 respectively.
—The creation later this year of a uniform scheme which will integrate deserted wife's benefit and lone parent's allowance into a new non-means-tested scheme.
—All recipients of black-and-white TV licences to get a free colour television licence.
—An increase from £5 to £10 in the amount of additional means disregard for the purposes of free fuel.
—Pensioners who are cared for by a recipient of a carer's allowance to get a free travel companion pass.
—Improvement and enhancements to the back to work allowance which is one of the main elements of my Department's employment support measures.
—Improvements to the tune of £1 million in the students summer jobs scheme. This will mean a substantial increase in the £540 which students received last summer.
—A further extension of the employer's PRSI exemption scheme which will be modified to include young people under 23 years of age being taken on into a new job as their first employment.
—An extra allocation of £3 million for supports to voluntary and community organisations to bring the total for 1995 to £10 million.
—An additional £400,000 of funding for the combat poverty agency.
—Department of Social Welfare to take over responsibility for the National Social Services Board.
—A special allocation of £250,000 for an integrated citizen's information computerisation project, the National Social Services Board.
Examples
The impact of the rates increases in this year's budget can be best illustrated by a number of examples.
—A couple with three children on either unemployment benefit or disability benefit will get an increase of £7.25 or 4.8 per cent, taking child benefit into account, which will give them a new weekly payment of £159.45.
—A couple with three children on short-term unemployment assistance or supplementary welfare allowance will get a new weekly rate of £157.35 which is an increase of £7.25 or 4.8 per cent on their current payment, taking child benefit into account.
—A couple with four children in receipt of long term unemployment assistance will get an increase of £8.86 or 5.2 per cent, including child benefit, to give them a new weekly payment of £180.03.
—An old age pensioner couple on old age non-contributory pension will have a new weekly payment from mid June next of £125.00 which is an increase of £3.00 on their current payment.
Once-off Grants to Individual Organisations
—£50,000 to the inner city organisations network to develop an integrated educational and family support programme initiative in Dublin's north inner city.
—£75,000 to the north Clondalkin community development programme to develop a centre for community groups in the north Clondalkin area.
—£30,000 for Newbury House Family Centre, Cork towards an extension for a community arts studio.
—£45,000 for Rivermount Youth Link Project Ltd. to develop centre for community groups in south Finglas.
—£50,000 for the Society of St. Vincent de Paul, Drogheda for the establishment of a workshop to restore second hand furniture, electrical goods, clothing, etc. for passing on to the society's clients.
—£50,000 for Aontas to develop an advice and support desk for local community-based adult education groups.
—£30,000 for the Cork Social and Health Education Project to assist with their personal development and group training courses.
—£25,000 for the Capuchin Centre for Homeless Men towards the running costs of their hot meals service.
—£50,000 allocation for support of voluntary sector at regional level in context of input to structural funds monitoring and networking of community development groups.
—£20,000 for Barnardos towards provision of an administrative service for a number of small voluntary organisations. This service provides them with a professional accounts and administrative service and allows volunteers to concentrate on the group's mission.
—£50,000 for Community Action Network towards the cost of a permanent premises.
£50,000 for Inishbofin Development Association towards the construction of a community centre on this off-shore island.
—£20,000 for the Bosnian Ireland Association towards the establishment of a resource centre for the Bosnian Community in Ireland.
—£40,000 for Clare Unemployment Resource Centre towards the purchase and renovation of an old mill in Ennis for use as a permanent resource and adult education centre and a base for other voluntary organisations in the town.
—£100,000 for Cumann Iosaef, Tralee towards the construction of a community centre in Tralee.
—£50,000 for Energy Action to continue and extend their work of insulating homes of the elderly and other disadvantaged groups.
—£40,000 for Focus Ireland to establish a pilot national community volunteer corps.
—£50,000 for the Newlands Institute for Counselling to remove their premises.
—£20,000 for St. Carthage's Voluntary Housing Association, Lismore, Co. Waterford towards the cost of furnishings and equipment for a housing complex for the elderly.
—£20,000 for Threshold for the establishment of a Charity Shop, in which second hand clothing and household goods to generate ongoing income to support Threshold's work.
—£20,000 for OPEN (One Parent Exchange and Network) towards the start up costs of this newly formed network of lone parent self-help groups.
—£20,000 for the Shanty Educational Project towards their personal development and community training courses.
—£40,000 for the Tallaght NOW Project to allow the group to continue the work they commenced under the EU NOW initiative.
—£20,000 for the Tallaght Childcare Project to allow the group to continue the work they commenced under the EU NOW initiative.
—£15,000 for Wallaroo Preschool, Cork to allow the group to continue the work they commenced under the EU NOW initiative.
—£60,000 for ICTU to enable them to employ two training officers to develop the social welfare advice role of their Unemployed Centres and provide specialised training opportunities.
—£60,000 for the Irish National Organisation of the Unemployed for the continuation of their Welfare Resource Worker, for a number of research projects and publication of a manual for the unemployed.
—£30,000 for the National Adult Literacy Association to employ a Development Worker to assist in developing second chance options and service for social welfare customers.
—£40,000 for Crosscare for a special project which deals with teenage problems in a family context.
—£50,000 for Focus Point to assist in the development of their services for homeless people.
