Vol. 497 No. 2
29 Mr. J. O'Keeffe asked the Minister for Social, Community and Family Affairs his views on the recently published statement by the ESRI that social welfare rates must rise in line with growth in other incomes if the benefits of economic growth are to be spread more evenly across the community. [24449/98]
One of the Government's key objectives is the establishment of an inclusive society where everyone has the opportunity and the incentive to participate in the social and economic life of the country. In formulating proposals for the 1999 budget, the Government will aim to ensure that the benefits of economic growth are shared by all.
With specific regard to increases in social welfare rates, current policy in this area is determined having regard to the Government's Action Programme for the Millennium, Partnership 2000 and the National Anti-Poverty Strategy. These commitments include increasing the real value of social welfare payments; increasing the old age contributory pension to £100 by the year 2002, and bringing the lowest rates of payment up to the rates recommended by the Commission on Social Welfare by 1999.
The 1998 budget has already made significant progress in these three areas. It provided for a general increase of £3 per week for some 560,000 social welfare recipients aged under 66 years, with pro rata increases for a further 6,000 people on reduced rate contributory payments, together with a 3 per cent increase, in general, in the rates for some 144,500 qualified adults.
The 1998 budget provided for a special increase of £5 per week in the maximum personal rates of payments for some 270,000 pensioners aged 66 and over, with pro rata increases for a further 54,000 pensioners on reduced rate contributory pensions. This was a significant first step towards achieving the commitment in our action programme to increase the rate of old age contributory pension to £100 over the Government's five year term of office. These increases represent real increases of 3.5 per cent to 4.5 per cent.
Substantial progress has also been made in relation to bringing the lowest payments up to the Commission on Social Welfare recommended rate. The 1998 budget increases mean that payments to over 797,900 recipients, representing 93.5 per cent of all recipients, are about or above the minimum recommended rates, while payments to a further 57,000 recipients of short-term social assistance, equating to 6.5 per cent of the total, are still about 3 per cent below the target rate.
In relation to future increases, a number of factors will have to be taken into account. It will remain a priority to ensure that the real value of payments will at least be maintained in real terms. In addition, this Government is committed to raising the old age pension to £100 per week — a rate of increase expected to significantly exceed inflation.
Does the Minister accept that the ESRI is an independent body and that its comments and criticisms can be accepted as being objective? Does he further accept that the recent ESRI report stated very clearly that recent budgets have favoured high earners and that social welfare rates must rise in line with those of incomes if the benefits of economic growth are to be spread more widely across the community?
I accept the ESRI is independent. I had a very long and detailed discussion with the ESRI at my instigation just before it published that document — which I had no knowledge it was publishing — to get its views on the issues in regard to low income families. A number of issues are raised in that report which are very pertinent to the budgetary strategy which I and my Government colleagues will be looking at. However, it is important to point out that the pension increases in the last budget were above both price and wage increases, which is in stark contrast to 1995-7 when pensions did not increase beyond wages, as was suggested at that time.
Will the Minister accept the ESRI report is a clear criticism of the last budget, in particular? Will he further accept the ESRI report made it clear that a continuation of that policy trend, with social welfare rates increasing more slowly than average incomes, will see a rise in poverty in coming years? On that basis, will the Minister give an assurance to the House that the trend established, particularly in the last budget, of favouring the rich over the poor will not be pursued in the forthcoming budget?
In my discussions with the ESRI, and I believe in its report, it indicated that it was the case for a number of years prior to last year that people were falling behind. However, it acknowledged to me that the increases in the last budget were very significant and went a long way to reducing that discrepancy. I assure the House and the Deputy that this report will be very much to the fore in the Government's building upon the work we carried out last year, where we gave very substantial increases in social welfare payments which were far in excess of those delivered in previous years.
I do not accept the line the Minister is taking because it is clearly contrary to what the ESRI has said. Will the Minister accept that in the forthcoming budget — and in any other budgets if the Government manages to hang on to office — the benefits of growth must be spread more widely throughout the community? In order to prevent the rise in poverty to which the ESRI referred, social welfare increases must rise, not in line with the CPI or inflation but in line with other incomes. If the Government does not accept that, poverty will increase.
The time for Priority Questions has expired. We must proceed to other questions.
