Vol. 486 No. 4
24 Mr. J. O'Keeffe asked the Minister for Social, Community and Family Affairs his views on the 1998 social welfare budget increase of £125 million in the context of 1997 savings of £160 million; and the future proposals, if any, he has by way of reallocation of savings or otherwise for social inclusion measures during 1998. [2882/98]
The cost of the 1998 budget measures in the social welfare area will be £125 million this year and £225 million in a full year. This is the largest budget package in many years — £11 million higher than the budget presented in 1997 by the previous Government, an increase in the region of 9 per cent on the previous year.
The budget provided for a £3 increase in all weekly rates of social welfare payments, together with a 3 per cent increase, in general, in the rates of qualified adult allowances. It also provided an overall increase of £5 per week in the maximum rates of payments for pensioners aged 66 and over. These represented real increases — over and above expected inflation — of between 2.2 per cent and 5.4 per cent.
When these increases come into effect at the start of June 1998, all but two payment rates will have exceeded the rates recommended by the Commission on Social Welfare. Furthermore, from September child benefit will be increased by £1.50 in respect of the first and second child, and £3 in respect of the third and subsequent child in a family. Family income supplement will be assessed on a net income basis from next September as promised in Partnership 2000.
These improvements represent substantial progress towards meeting the commitments to social inclusion measures contained in An Action Programme for the Millennium and in the Partnership 2000 agreement.
As regards the 1997 savings of £160 million, a significant element of my Department's administrative effort is committed to programme control and anti-fraud activities. The work involved is ongoing and the savings that accrue are incorporated in the annual estimates and budget process when expenditure proposals are set.
This year's budgetary provision for social welfare improvements was determined in the light of overall budgetary and economic requirements, and also took account of the various commitments regarding social inclusion contained in Partnership 2000 and in the Government's programme. As a result of this year's initiatives, the commitment to spend an additional £525 million on social inclusion measures — including social welfare rates increases — during the three year period of the partnership has been more than exceeded in the first two years, largely because of the large increase this year.
I thought this budget provided an opportunity for fair play for everybody, particularly for the weaker sections of the community. Does the Minister accept that it is not fair that, when there is a great deal of money around, the social welfare budget, which is the main instrument for helping the needy and the underprivileged, does not even get the savings it made last year? From that point of view, does he accept that, essentially, trimming the social welfare budget at a time of such enormous prosperity is not fair and it is not sharing the wealth of this society with those in greatest need?
These savings are built into the figures in the Estimates and they are not available to us. The budget package is the largest since the early 1980s, when the rates of inflation led to high nominal increases in social welfare payments. What was given in the budget is one of the largest social welfare budget packages, if not the largest budget package, in recent times, and it is significantly larger than that of the last year when Deputy O'Keeffe's party was in Government.
It is not extra money. It is money which is already built in to the Department's expenditure. The Deputy may want to argue about whether the savings made in the Department should be handed out. If he wants to go down that road, there were savings of £156 million in 1997 and, in the budget year cost, we gave £125. In 1996 there was a saving of £141 million and that Government gave £113 million in the budget year cost. The previous year the saving was £124 million and £80 million was given. I am just making the point that it is wrong to make that argument because it is not tenable. The savings are already built in to the Estimates. It is the actual increase, which is given not only in the budget year but in the overall year cost, which makes the difference. The £125 million and the £225 million in a full year was one of the most significant increases for social welfare recipients. That is widely accepted.
I am not complaining about the savings. I am delighted control and anti-fraud measures are ensuring that money is not going to people who do not deserve it. I would be particularly happy about that if I thought the money in question was funnelled to, and focused on, those who really need it. It is in that context that I am comparing savings of £160 million last year and the provision of only £125 million extra for social welfare this year.
Does the Minister accept that we have never had it so good, the economy is flying and the country is bursting with wealth and there is a duty and an obligation to stretch ourselves to ensure the benefits of the Celtic tiger reach the under-privileged? From that point of view and in the interests of fair play will he agree it is a rather miserable approach to confine the social welfare increases in that way and that, consequently, the poverty gap has widened in our society? Does the Minister accept that can only lead to alienation and that the social dividend which is available from fair play for all will not now ensue?
The savings are already built in to the budgets and they do not bear out what is given in the budget package. If the Deputy wants to make that argument, £124 million was saved in 1995 and in 1996 only £80 million was given as a budget package. In the December 1997 budget package the budget year cost was £124 million, a 9 per cent increase on the previous budget, which was £113 million, which, I must remind the Deputy, was in an election year.
The budget increases of £5 which we gave to old age pensioners involved an increase of between 5.4 per cent and 7.4 per cent above a rate of inflation expected to be somewhere in the region of 2 per cent. At no stage when the Deputy's party was in Government did it come anywhere near giving that percentage increase to old age pensioners or, indeed, the general increase which we gave, taking into account the rate of inflation then. I do not accept this was creating a poverty trap. I know the Deputy must make his case, but this was one of the most generous budget packages for many a long year. The vast majority of people accept that.
I would like a "yes" or "no" answer to my final question. Was the Minister satisfied with the money allocated to his Department in the budget?
The Deputy is aware that Ministers are not usually satisfied in that regard. However, I was more than satisfied, particularly when I took account of the fact that the allocation was significantly higher than that obtained in the previous budget which was delivered in an election year. I would have thought the previous Government would have been more generous.
The rumours of stand-up battles with the Minister for Finance, Deputy McCreevy, are incorrect.
The £113 million allocated last year was a great improvement on the £80 million allocated in 1996. In 1998, the allocation has risen to £125 million and if the Deputy ever becomes Minister for Social, Community and Family Affairs he will be more than satisfied with a budget package of that magnitude.
The Minister will have to fight harder for additional funds on the next occasion.
