Deputy Ardagh moved the adjournment. He is sharing time with Deputy Ellis. There are 14 minutes remaining in the slot.
Social Welfare (No. 2) Bill, 2001: Second Stage (Resumed).
It is a great pleasure to speak on the Social Welfare (No. 2) Bill, 2001, this morning. It is an occasion to applaud the great work of the Minister for Social, Community and Family Affairs, Deputy Dermot Ahern. When the tenure of the Minister is looked at in historical terms, I believe he will be seen as the greatest Minister for Social Welfare this country has ever seen. He has overseen the greatest development in the elimination of poverty since the foundation of the State. He has recognised the need for funding the pensions of our senior citizens, not only during the tenure of this Government but also in the future beyond 2025, by setting up the national pension reserve, which the NTMA manages. He has also arranged for 1% of GNP to be set aside each year in the future.
Deputy Dermot Ahern is part of the successful Government led by Deputy Bertie Ahern as Taoiseach, which forms the most competent management team ever seen in Government in Ireland.
Having gone around the constituency of Dublin South Central and attended the various meetings in Walkinstown, Crumlin, Ballyfermot and the south-west inner city over the last weekend, I am more confident that this Fianna Fáil-Progressive Democrats Government will return to office after the next election.
Labour Party Members in their contributions to the debate on the budget have concentrated on newspaper clipping and the remarks of so-called objective economic assessors. I suggest that the Labour Party is living in a time warp. There was a time when people took on board the musings of the commentators. They have since learned that, despite the commentators, this Government can and will continue to manage the economy in a manner which is in the best interests of the people in both the short and the long term. From my discussions with hundreds of constituents over the past week, I can inform the House that the people acknowledge this and will show their confidence in the Government next April or May by returning this Fianna Fáil-Progressive Democrats Government for another five years.
Aspiring Ministers in the Labour ranks may just cool it. Those may-be Ministers, who do not know whether they would accept a position in Government in the middle of next year, should not concern themselves or worry unduly about the matter. I can assure them that the question will not arise. Rather than accepting the writings of the commentators and musing philosophically about the budget, they would be better to go out among the people and find out what their priorities are and respond positively to them as this Government has done.
From my perspective and that of Fianna Fáil colleagues to whom I have spoken, there is no wish on our part to be contaminated by Labour Party policies, which in the recent past have given rises to our senior citizens of £1.80, £2.20 and £3 against this Government's rise of £38 over the five years we have been in office. The Labour Party will get its answer when the ballot boxes are opened next year.
(Carlow-Kilkenny): The bullet box would be more like it.
"Get real," they will tell us. They can keep their ideologies and philosophical rants. They can bluster on RTE but they will not bluster the people. The Labour Party has some able people, some of whom have missed their true vocations. They should be in theatre. The Labour Party offers light relief at times and cerebral gobbledygook at other times. Some Labour Party Members will be returned at the next election but their number will be smaller than at present. Labour Party Members who aspire to Mercedes cars, drivers and ministerial office have a good ten years ahead of them on the Opposition benches and their numbers will be much fewer. That is the wish of the electorate.
I thank the Government on behalf of the voters of Dublin South Central for the marvellous increases not just in this budget but during all this Government's years in office. Those people have told me that they will ensure the Fianna FáilProgressive Democrat Government is returned to office at the next election to continue its magnificent work.
(Carlow-Kilkenny): Do I hear whistling past the graveyard?
No. I am telling the Deputy about the reality. The management by the Government for the last five years is recognised by the people. The reality is that people will vote for the Fianna Fáil-Progressive Democrat Government and return it to power after the next election.
(Carlow-Kilkenny): Dream on.
This year's budget proposes many increases. Yesterday at lunch time I met a woman who was very grateful for the £10 per week increase in the old age pension. She had been expecting an increase between £2 and £3. The fact that our senior citizens think that way is a sad legacy of the Labour Party, which gave increases of that order when last in Government, dear oh dear. A £20 per week increase in payment for a senior citizen couple was beyond the wildest dreams of some of the people I met but it is now a reality.
The child benefit rate for four children is now £417 per month. When the Government is returned to office next year increases of a similar nature can be expected, as was promised not in this year's budget but a year ago.
I give credit to Deputy De Rossa for his work on child benefit when he was Minister for Social Welfare. It is not unexpected that he deserted a sinking ship, the Labour Party, as he is a pragmatist, a species alien to the Labour Party.
This is an amazing budget.
(Carlow-Kilkenny): That is true.
The £850 million given in social welfare increases is a credit to the Government and the Minister for Social, Community and Family Affairs.
We all appreciate the work done by Deputy Ahern as Minister for Social, Community and Family Affairs over the last five years. Nobody appreciates it more than the people who depend on him and his Department for the benefits they need, whether it is an old age pension, unemployment payment or so on.
I understand why this Bill arouses envy on the Opposition benches. When we spoke about a £100 per week non-contributory old age pension in 1997 we were told it was an unrealistic dream but since then the dream has been fulfilled. Not alone did we achieve a £100 pension, but after this budget the pension rate is £105.53 for a non-contributory pension and approximately £116 for a contributory pension. The various benefits and free schemes all show this is a caring Government when it comes to older people and those who depend on social welfare.
The changes in child benefit are also welcome. In 1997 the rate for the first and second child was £29 while the rate for the third and subsequent children was £34. The monthly rate now for one child is 117, for two children is 235 and for four children it is 529.80. Those increases prove that the Government has taken to heart the need to help children and the parents of young families. The increases given are totally warranted and are among the most progressive decisions taken by the Minister and the Government.
People said the Government would not last a week at the start of its term. Then people said it would not last two years and when it reached two years they said it would not last three. It has run its full term and when people are asked to make a decision next May, despite Deputy Browne's hopes which will be dashed again as they have been several times in the past—
(Carlow-Kilkenny): Keep saying it.
—the Government will be returned to office. There is no doubt about that. It has been a caring Government and has looked after those in need of care.
The changes for carers are also welcome. We once had a carer's allowance which was means tested and if one had over £70 per week in means in 1997 one was excluded. Now a couple can have over £300 per week income allowance and still be entitled to full carer's benefit. We know the enormous amount of work done by carers in looking after those who are house bound handicapped and so on. We also understand however that no matter what people may get, it is no compensation for the loss they sustain. Everyone accepts that one can never make a monetary contribution sufficient to deal with the problems of disability in a home.
In 1996-97 the widow's pension was £64.50. Under the new scheme proposed by the Minister it will rise to £97.11 or 123 for those under 66. We all accept that widows have often been forgotten by Governments but the Minister has moved to close the gap and make the situation more equitable by helping those in need. We as Members deal with the public and the technical problems with the social welfare code that we have found have now been dealt with. Many social welfare anomalies have been cleared up.
There has been much comment about the money taken from the social welfare fund to balance the budget. Everyone accepts the fund was in surplus and it would have been foolish not to use it for the benefit of those in need of social welfare. It is accepted by all parties that if there was a crisis and the money needed to be used for those in receipt of social welfare benefits, then the fund should be used. It has been used and nobody should make an apology for it.
(Carlow-Kilkenny): Keep saying it.
Deputy Browne can shake his head but if he looks at the suggestions his party has made about social welfare increases he will see the Government has been much more caring. He walked through the lobbies to vote through the 1996 budget, which gave old age pensioners £1.75 per week.
(Carlow-Kilkenny): The Minister for Finance talked about writing a second book when he made his Budget Statement. This is the final chapter in my great odyssey through the Oireachtas and I expect to publish my biography after my speech. There is probably nobody who will buy it but that makes no great difference.
I regret that the Minister for Social, Community and Family Affairs has left the Chamber, as I wanted him to answer a question or two. Perhaps the Minister of State will make sure he answers the questions when he replies. Last evening, the Minister for Social, Community and Family Affairs said:
I am bringing forward the budget increases in weekly rates of payment to 1 January. This means that in 2002 social welfare clients will be paid their increase for the full 52 weeks of the year compared to 29 weeks when we came into office in 1997.
That is a false statement, which I would call a lie if I was allowed to use the word. The Minister is playing with figures that if an increase in May was followed by an increase the following May, 52 weeks would have passed. The Minister misused the English language by talking about an increase of only 29 weeks in 1997. I was prepared to give way to the Minister to explain the falsehood and I invite the Minister of State, Deputy Dan Wallace, to correct the statement. A decent Fianna Fáil backbencher repeated the same rubbish last evening so I suppose it is circulating from that party's press office. Will the Government clarify its allegation that an increase in 1997 was for only 29 weeks?
The matter will be dealt with by the Minister, Deputy Dermot Ahern.
(Carlow-Kilkenny): It should not have to be dealt with as the statement should not have been made.
The Deputy asked for it to be dealt with, so he should make up his mind what he wants.
(Carlow-Kilkenny): I thought the Minister of State, as a representative of the Government, would be able to clarify the matter. The Government is playing with words and abusing the English language by talking about 29 week increases in other years. Civil servants from the Department of Social, Community and Family Affairs should clarify the matter in the Minister's reply as I want this abuse of the Dáil remedied.
I appreciate the difficulties of Deputies on the other side of the House.
The Minister of State should allow Deputy Browne to continue.
(Carlow-Kilkenny): I regret that this matter has not been resolved. Fritz Kreisler was the greatest violinist of all time, but he cannot compare to the Minister, Deputy Dermot Ahern, who has repeated the same tune time and time again. In his speech last night, the Minister compared the percentage social welfare increases of this Government and its predecessor, but he forgot that while this Government has been in office for five years, the Rainbow Government lasted just over two years. It is time that such a senior Minister stopped repeating himself as he is not comparing like with like. While it is marvellous to hear Government backbenchers saying that Deputy Dermot Ahern is a wonderful Minister, he was lucky to have been in office at a time of budget surpluses. The Government came into power at a good time in contrast to the former Taoiseach, Dr. Garret FitzGerald, who took over when inflation was 24%.
The Deputy is reminiscing.
(Carlow-Kilkenny): It is never remembered that inflation had decreased to 4% by the time Dr. FitzGerald left office. It was easy for the Minister for Social, Community and Family Affairs to be generous when money was falling from the trees and the land was flowing with milk and honey. He has failed his first test, however, by raiding the piggy bank as soon as the economy begins to slow.
What does the Deputy have to say about the Social Welfare (No. 2) Bill, 2001?
(Carlow-Kilkenny): The Government will be found out when the election is called.
The Deputy should be positive and give credit for the increases.
Deputy Browne should be allowed to make his speech.
(Carlow-Kilkenny): I will not be in this House this time next year, but it is likely that the Minister of State, Deputy Dan Wallace, will be here. I pity those who will be here as a tough budget will be needed to rectify what has been done this year.
The Deputy is a prophet of gloom.
(Carlow-Kilkenny): My comments are backed up by newspaper editorials and the so called impartial observers.
This Government has delivered.
(Carlow-Kilkenny): If journalists write accurately, they can be regarded as impartial by their readers, but those who are unhappy with the content of newspapers are inclined to question journalistic impartiality and to make allegations of bias. It is amazing that so many commentators have argued that it is not a good idea to raid the social insurance fund.
It has been a difficult week for Fine Gael.
(Carlow-Kilkenny): A distinction has been made in recent years between widows over the age of 66 and widows under that age. I have asked the Minister for Social, Community and Family Affairs to explain why widows over 66 years have been given an increase of £12, while those under that age have been given £8. Why is it imagined that a widow aged 60 has fewer expenses than a widow aged 70? If there are surplus social welfare funds, they should be used to give increases to widows under the age of 66. What is the point of having an insurance fund, built up from the contributions of taxpayers, if it is not used for pension increases? I would like the Government to explain the distinction between widows of different ages because although younger widows may benefit from children's allowances, it could be argued that they face greater difficulties as a result of costs such as heating and providing for children. The children of a widow aged 70 may help her out, but younger widows have to look after their children. I fail to understand the philosophy which considers that younger widows should get less money. If the fund is still in surplus next year, a Fine Gael Government will look after widows under the age of 66.
It will have to deal with overheating the economy.
(Carlow-Kilkenny): The Minister of State will remember my words and he will say “well done”.
I remember the Fine Gael Party's promises four years ago.
(Carlow-Kilkenny): The Minister of State will congratulate us.
Fine Gael has listened to the Government this week.
I can tell from the Minister of State's responses that Deputy Browne is hurting the Government. He is landing punches.
The Opposition is very sad.
(Carlow-Kilkenny): I am doing my best to continue.
I am trying to get order in the House. Deputy Browne will have to be allowed to conclude his speech before other Deputies are given a chance to contribute.
The Government will have to send in its heavyweights.
(Carlow-Kilkenny): I am not reading a propaganda speech prepared by others, unlike other Deputies who should know better.
Deputy Browne and Deputy Enright may make a comeback.
(Carlow-Kilkenny): The fact that legislation is needed proves that the social insurance fund is not being used for its proper purpose. We will soon justify robbery from banks by introducing legislation and by saying that the money was needed for charity. I do not agree with retrospective legislation, which in this case means that we are nullifying the fact that it is illegal to take money from the social insurance fund.
The Rainbow Government took £18 million from the fund in its last budget.
(Carlow-Kilkenny): The Minister of State is getting very upset for some reason.
The Minister of State will have an opportunity to contribute at the end of Second Stage.
The Minister of State will have to leave the House.
(Carlow-Kilkenny): If we are to hark back to previous events, I can mention poor Brian Ború, who was killed while praying in his tent.
I am compelled to remind Deputies of the facts if they are contradicting themselves.
(Carlow-Kilkenny): Where was the Minister of State when Brian Ború was killed? We should decide how far back into history we are prepared to go to make a point. Should we stop in 1994 or 1996, or should we go further back?
The Deputy would like to forget the past.
(Carlow-Kilkenny): It is not reasonable for the Minister of State to compare the last five years, when the country was awash with money, to a time when inflation was 24%.
There would be fewer interruptions if the Deputy addressed his remarks through the Chair.
(Carlow-Kilkenny): I admit that I would much prefer to talk though the Chair. Yesterday I raised the matter of the summer scheme for students, for which the Minister for Social, Community and Family Affairs is responsible. I understand the Union of Students in Ireland was protesting outside Leinster House yesterday, but I did not see the protest as I was here too early. Students work under this scheme to earn money in preparation for their return to college, but the Minister could only guarantee me yesterday that he would do his best to pay them before Christmas. The Minister's photograph appears in many newspapers at public expense in an attempt to get re-elected. God be with the days when Ministers did their jobs and advertisements were posted by civil servants. The Minister looks after his publicity, but ignores the difficulties in Donegal that have meant that many students have not been paid. Is the strike continuing in Donegal? The Minister should concentrate on his duties rather than engaging in photo opportunities.
If the Minister wrote to all social welfare recipients, they would know about the euro. We do not have any hope if we cannot rely on the Government to give proper value during the changeover to the euro. It would be preferable if businesses and shops sent out letters indicating the exact prices of goods. What is the problem with guaranteeing people that the Government will not wrong them? Is this a sign of guilt?
The Government will not wrong anyone. The Deputy should withdraw that remark.
(Carlow-Kilkenny): Why is this amount of money being wasted on a euro advertisement to the effect that amounts will be rounded up? If a letter was sent to everyone they would be guaranteed to receive it. How many people will see this advertisement in the newspapers or on the television? Is there a need for such fuss guaranteeing people that the Government will be honest with them? We expect the Government to be honest with people and to round up the euro figure. Too much money is being wasted on this publicity stunt.
We have advocated for many years that the fuel scheme be increased from £5. Every year the Minister offered reasons against such a change. I welcome the increase in the figure this year, but what is the reason the Minister changed his mind? Did we eventually get to him?
The Deputy is contradicting himself. He should make up his mind.
(Carlow-Kilkenny): I look forward to answers to these questions.
The Government claims to have an overall strategy for tackling poverty and I applaud any such efforts. The increases in social welfare payments are generous to some extent, but they have many flaws. One of the main problems faced by some of those dependent on social welfare payments is that they do not qualify for a medical card. It is important to examine such cases.
People on low incomes face significant difficulties. Those just above the threshold will have difficulty obtaining a medical card. Some of those in receipt of social welfare payments or on low incomes do not qualify for a medical card. It costs £25 to see a doctor and a visit to a chemist may cost £50. When these figures are subtracted from a low income it makes life very difficult for those involved.
A single person living alone on £120 or £130 per week does not qualify for a medical card. The Government should review such cases. This is not the sole responsibility of the Department of Social, Community and Family Affairs as it also concerns the Department of Health and Children. However, such situations should be re-examined as part of an overall social welfare package. I appeal to the Minister of State to discuss the matter with senior officials in these two Departments to see if this issue can be resolved. The threshold is rigidly enforced so those just above it are deprived of medical cards and, therefore, cannot afford to visit a doctor.
It is essential that the fuel scheme should operate for the full year. I welcome the existing period over which it operates, but there is a need to extend it to 12 months. One can experience bad weather at any time of the year in Ireland. One can also experience good weather in December, as is the case today. However, August can be cold and wet, so the scheme should be extended to operate for the full year.
Irrespective of how the Minister of State may view it, the attack on the social welfare fund is serious. The decision to take money from the fund will have repercussions. The Minister of State may claim that I am prophesying gloom and doom, but that is the reality.
Prior to the last election Fianna Fáil was in favour of retaining the social welfare fund. This fund was established to provide for pensions and other social welfare entitlements and it is important that it is retained. The fund has been attacked to pay for current spending, something for which it was never intended. This is a smash and grab raid. The fund has been built up and it is being attacked to try to avoid the need to borrow.
The Deputy is panicking.
Deputy Enright is entitled to freedom of speech in this House. He has only a few minutes left so I ask Deputy Ahern to desist.
Senior members of Fianna Fáil will recognise that many strokes were pulled with regard to balancing the books when former Deputy Charles Haughey was Taoiseach.
That is typical of Fine Gael. I am surprised that Deputy Enright would sink to such depths.
Serious damage was done to the economy at that time through the presentation of inaccurate figures which did not give a true picture of the financial position.
There are no inaccurate figures here.
These are more signs of panic on the part of the Deputy.
Deputy Michael Ahern would recognise what happened as this occurred under his watch when former Deputy Charles Haughey was Taoiseach. Many people were unhappy as they knew what was happening was wrong and damaging to the economy.
This happened when former Deputy Garret Fitzgerald was Taoiseach. He doubled the national debt. This is revisionism at its worst.
Deputy Enright will be given injury time if these interruptions continue.
The same is happening with this attempt to balance the books. What is happening is wrong and the sooner that is recognised the better. Many people are concerned about the manner in which the Government has mismanaged the economy. This mismanagement will have serious economic effects.
Fine Gael did the same.
This is a smash and grab raid on the social welfare fund. It is a serious matter and this approach is wrong. This is an attempt to produce a budget surplus when the reality is entirely different. That is wrong and will be proved to be such. I hope this decision does not do long-term damage to the economy but this approach is wrong. The sooner the Government recognises this fact and mends its ways the better.
I wish to share my time with Deputies Wade and Michael Ahern.
I commend the Minister, Deputy Dermot Ahern, and the Government for providing outstanding increases for the less well off. In budget 2002, the Minister for Finance, Deputy McCreevy, provided for the most vulnerable in our society. This year's budget will provide for those who need help most, with increases in child benefit, pensions and welfare payments from January 2002. Increases in social welfare will now be payable more than five months earlier than when the Government came to office. I compliment the Government and the Minister for Social, Community and Family Affairs on this measure.
The £850 million additional social welfare spending announced in the budget equals last year's increases and means across the board increases for all social welfare recipients. These increases mean that despite a more difficult economic situation, the less well off will fare best. The total social welfare budget next year will be more than £7.4 billion.
The increases announced in this year's budget, particularly those for older people, carers and the unemployed, represent further steps towards reducing poverty and disadvantage. Families will benefit greatly from this budget. For the second successive year child benefit has increased by £25 per month for the first and second children and by £30 for the third and subsequent children. This increase brings a monthly payment for the first and second children to £92.62 and for the third and subsequent children to £116. A family of three children will now receive £301.24, compared with £221 at present, an increase of £80 per month or 36%. Child benefit has tripled since the Government came to office. In 1997, the rainbow coalition's Minister for Social Welfare, the famous socialist, Deputy De Rossa, gave an increase of £1, compared to £25 this year and last year. The back to school clothing and footwear allowance has also been increased. From next year 70,000 children aged 12 and over will benefit from an increase in the payment rate, which has been raised to £94 per child. By easing the means test, another 8,000 children will be eligible for inclusion in this scheme. An increase in the income threshold for family income supplement will bring the average payment to £59 per family.
The elderly will also gain significantly. The full personal rate of old age, retirement and invalidity pensions is to be raised by a minimum of £10 per week. This brings the old age contributory pension to £116 per week and the old age non-contributory pension to more than £105 per week. These increases mark an increase of almost 50% in those pensions over the past five budgets. These amounts also exceed the Government's commitment on entering office to raise old age pensions beyond the £100 mark. The increases are well ahead of inflation and will mean a real improvement in the living standards of the elderly. The fuel allowance is being increased by £2.09 per week from next month. This is the first increase in this allowance since 1985 although the number of months covered by the scheme was increased last year and the scheme now operates from October to mid-April. The free electricity allowance gives an extra 300 free units, to bring the allowance up to 1,800 units and the qualification criteria for the free telephone allowance is to be relaxed. There will be further improvement in tax relief for the elderly. Income tax exemption limits have substantially increased in the past four budgets. It is only right that the Government has rewarded the older generation for their sacrifices, work and contribution to making the Irish economy what it is today.
Those aged over 66 on the widow's contributory pension will receive an increase of £12, bringing the payment to £114 per week. The widowed parent grant will be doubled to £1,970.
For those who provide care in our society there are also improvements. There will be a further easing of the income disregard for the carer's allowance. This will benefit 3,400 new carers and 2,300 existing carers. The annual respite care grant will increase to £500 annually.
This Government has done more than any other in the history of the State to support the disadvantaged and to promote social inclusion. The budget continues this trend and provides further steps towards reducing the level of poverty and disadvantage in our society. I compliment the Minister, Deputy Dermot Ahern, on the marvellous work he has done for the elderly and the less well off in the past five years.
I am delighted to be able to speak on the Social Welfare Bill. I pay tribute to the Minister, Deputy Dermot Ahern, who will go down in history as one of the great Ministers for social welfare. He is a kind and considerate man.
Is he dead?
Deputies from Fine Gael and the Labour Party often tell us how much they care for older people and the less well off. Later today however, unless they get some sense, they will be whipped into the Níl lobby to vote against almost £850 million worth of social welfare improvements. They will vote against the £10 increase in the old age pension and the £25 a month rise in child benefit and this weekend they will return to their clinics and expect their constituents to believe them when they tell them they want to make things better for older people and the less well off. Last week Fine Gael and the Labour Party opposed the budget, which took 68,000 low income earners out of the tax net. In the past five budgets they have opposed the measures which have taken 380,000 taxpayers out of the tax net, and with straight faces they tell us they care about the less well off.
We all remember Fine Gael and Labour in government and how little they did in the area of social welfare. Over the three budgets of the rainbow Government the old age pension was increased by an average of only £2.33 per year. That is no way to treat the older people who built up Ireland up from economic ruin. As recently as the autumn of 1986, after a lengthy period of Fine Gael and Labour coalition, we had the highest debt per head on the planet. In the autumn of 1986, the year after Live Aid, Ireland had a higher debt per head than Ethiopia or Sudan. How many of the people who worked so hard to pull us out of economic ruin then and in the years before, are now in receipt of old age pension? These people are entitled to receive increases. We now have a Government that will treat them with respect and the old age contributory pension will soon stand at £116 per week.
When the rainbow Government was put out of office in 1997, the child benefit rate stood at £30 per month for the first and second child and £39 for the third and subsequent children. Thanks to the Minister, Deputy Dermot Ahern, it will soon be £92.60 for the first child and £116 for the third and subsequent children. The Government has tripled the child benefit rates left behind by the rainbow coalition.
We have also brought forward and increased the weekly rates of social welfare payments to 1 January. This means that next year, most people on social welfare payments will receive their increased payments from 1 January. Some 210,000 people, including widows, widowers, one parent families and invalidity pensioners will receive a lump sum payment for the first six weeks of the year on 14 February. Under the rainbow Government, the miserable increases in social welfare payments were available for only 29 weeks per year. That is no way to treat our less well off.
The Fine Gael social welfare pre-budget submission proposed a £10.90 increase for widows and widowers. The Government is delivering £12. Even in opposition, when it does not have to balance the books, it could not match that. On the basis of its record in Government and more recently, measures such as special increases of £9.56 for those on the lowest rates of supplementary welfare allowance and short-term unemployment assistance would never have come from the party opposite. These are the kind of progressive social welfare policies that this country has been crying out for. Members of the Opposition have referred to the days of Brian Ború but I do not think any of us can remember back that far. There are many people however who can remember the days of an interparty Government when the old-age pension was 10 shillings a week and that Government took one shilling off it.
The Deputy should be careful with references to Brian Ború.
This was supported by the Labour Party who, at the time, hung their heads in shame. If one recalls those days it is well to remember what members of the Opposition did when they had their opportunity to run the country. The people who represented the party in those days did not mix with the ordinary working class. In the mid 1990s when the rainbow coalition was in Government and the money was there, they did not spend it on the elderly or the less well off. This is a caring Government which will continue to look after the underprivileged after it is returned to power.
I am privileged to speak on the Social Welfare Bill, 2001. In line with social welfare Bills of recent years, the Government has continued to improve the lot of those for whom the Department of Social, Community and Family Affairs has a responsibility of care. Having heard contributions from Members opposite and particularly from Deputy Hayes, the Fine Gael spokesperson, I wonder whether I am in the wrong House or the wrong planet. Perhaps Deputy Hayes is on the wrong planet. He does not seem to recognise what has been achieved by recent budgets.
The Deputy started his budget contribution criticising the Government for not giving significant increases to the lowest paid, specifically the increase in short-term unemployment assistance and supplementary welfare benefit. This has been increased to £93.56 per week but Deputy Hayes said it was not acceptable. In their recent document Fine Gael, and Deputy Hayes in particular, was looking for a £94 increase – just 44p higher than what was given. The Deputy went on to criticise the increase for widows yet his proposal was for an increase of £10.90 per week while the Minister for Finance has announced an increase of £12. Where is Deputy Hayes coming from?
The Deputy also accused the Minister for Finance yesterday of breaking the promises Fianna Fáil made in 1997 to continue with the prudent management of the economy. Referring to the social insurance fund, which has been raised every time a member of the Opposition speaks, he said it should not be used for any purpose other than paying social welfare benefits. When Deputy Quinn was Minister for Finance and the fund was in deficit he saw no problem using it to pay benefits other than entitlements under contributions.
On this occasion the social insurance fund is in surplus – there is money there to be used for the people. Is the Opposition against a £10 increase in social welfare, a £20 increase for pensioner couples, a £12 special increase for widows and widowers and so on? Would they argue against those increases being made by using money that is sitting in a fund? Are they suggesting we borrow instead? When one borrows, one must repay with interest and that will not benefit the country.
The announcement of the budget shocked every member of the Opposition. They did not know what had happened and went into a state of panic. They reacted irrationally and have continued to do so. I know, from reaction on the ground, that people acknowledge the Fianna Fáil led Government has again recognised what needs to be done in terms of social welfare to protect and improve the lot of those on pensions and social welfare benefits – those in need in every section of our society. The Government has done this consistently in recent years. The reason why it has and why this party has a record of caring for people is that, despite what commentators and academics suggest, we work with the people at every level of society. It is misleading to say that politicians are unaware of what is happening in our society. Most of us have clinics at weekends and are in touch by various means with everybody in our society including those in housing estates, on community councils, in community care and so on. None of us accept that we are out of touch.
There has been criticism of the budget from some sectors of society who feel the Government has not given enough. I have no problem with criticism but I am concerned that whenever increases are granted they are never enough. It is incumbent on the Government and society that people in need are looked after and have the necessities for a respectable standard of living. Everything is not perfect. Persistent critics do not acknowledge what is being done and the decisions that have been taken in difficult times by various Governments to improve the lot of our citizens. The Government is trying to do its best but social welfare is not a job. We must give people sufficient money to look after themselves and have a decent standard of living but they cannot expect it to be the same as someone who is working 18 hours a day.
I commend the Minister and his officials on putting together an excellent and improving service for those in need of social welfare in our society.
I ask that Deputy Bell speak for ten minutes in view of the fact that he has been in the Chamber for some time.
There are elements of the budget that any Member of the House would welcome. I have spent 14 of my 20 years in this House shadowing the Minister with responsibility for social welfare and I was particularly pleased that the increases in old age and widows pensions were more than usual. There are many other good elements in the budget and we must give credit where it is due.
As a responsible Opposition, we must also point out deficiencies. A large proportion of people who retire at 65 go on to retirement benefit, and, if they are lucky, a pension from their company. If they continue working, they cannot draw the retirement benefit but, amazingly, a year later – they can continue to work until they are aged 66 – they can get the old age pension and draw the benefit in full, plus the subsidiary benefits, subject to the payment of tax. I do not understand why this cannot apply at the age of 65. Workers have given enough service by the time they reach the age of 65, but many of them cannot really retire because they would suffer too big a drop in income if they did so. I hoped by the time I finished my term in Dáil Éireann that this would be gone because I have spoken about it for many years.
A constituent recently informed me of his post-budget situation. He is an employed married man whose wife works in the home and he will get an increase of £3 per week. He said that he had already got a notice informing him that bin collection charges would be increased to £204 in future – I understand Dundalk Urban District Council has a charge of £250. This is without paying any additional VAT, increased fuel costs or increased prices for cider drinkers. The 1% VAT will go down the line in addition to fuel increases and this will lead to an increase in the cost price of cars, car servicing, tyres and so on. Motorists received a bad hiding in the budget and social welfare increases, by and large, will not apply to them, except for one area which I will come to later.
We should not get carried away with the idea that everything in the budget is good. I accept that no Minister for Social, Community and Family Affairs, or Minister for Finance, ever produced a budget that pleased everyone. That would be utopian and would probably mean we would all be on social welfare. There has to be a balance but there are a number of matters I wish to point out to the Minister.
It was a bad budget for people on low incomes. I urge the Minister to take note of my point about the raiding of the social insurance fund. It was done to balance the books and to enable the Minister for Finance to avoid being embarrassed about breaking his own rules about high borrowings. My information is that an actuarial review of the likely cost of social welfare pensions has recently been completed. It is vital that we are told by the Minister whether this was based on assumptions of a larger social insurance fund than now exists. If that is the case, the exercise will have to be repeated and the results carefully reviewed by the social partners. The depletion of this fund has serious implications for workers and employers not just in relation to the cost of future pensions, but the likely need for future increases in PRSI to pay for them.
It has serious implications for workers and unions who have lobbied for improvements in the social insurance scheme such as the introduction of parental leave benefit. It also has serious implications for the working groups that have produced proposals for a fully inclusive social insurance model and, where it had been examined, the establishment of a social insurance fund board with representatives of the social partners. If this latter objective had already been received, it might have been more difficult for a Minister to dip into a fund that was built up by workers and employers to provide social insurance now and particularly in the future.
The Minister, Deputy McCreevy, took 1% to put into a reserve fund to deal with future State pensions. However, this is a raid on pensions of industrial and commercial workers and those in categories other than the public service. This needs serious consideration because I do not know how long my colleague, Deputy Dermot Ahern, will be the Minister for Social, Community and Family Affairs – that probably will be decided in the new year – but it could be that the next Minister, or the one after, will find that he does not have enough money in the fund to meet the cost of social welfare pensions.
There was enough money to bring the basic PAYE tax credits to a high enough level to take anyone on the minimum rate out of the income tax net, but this was not done. Workers on the standard rate of tax will only gain a mere £4.17 per week as a result of the meagre increases in tax credits. A single person will start paying tax once they start earning £165. One might ask what that has to do with the Social Welfare Bill and the Ceann Comhairle might remind me that I have strayed away from the subject matter, but it is interlinked in a positive way. Effectively, the increases in social welfare, because many people on social welfare or who are retired have cars now, will be totally wiped out.
Another issue I have consistently pointed out to my colleague, the Minister, relates to FIS. There is no doubt that the increases in FIS will be substantial – at every level it may work out at £25 per week. A one child family whose income is less than £285.10 per week, the current income threshold, will get 60% of the difference between the net income and the new threshold. Net income is defined as gross pay less tax, PRSI, health levy and pension contributions. A person could be earning £300 per week and still have a net income below the one child threshold. The vast bulk of workers are not aware of their entitlements under the FIS scheme. I am sure other colleagues in the House have had similar experiences at clinics where constituents are mystified when the subject of FIS is raised. I often had to get out the leaflet to explain the system to people – I am sure the Minister has done it as often, if not more often, than any of us. I do not know if the reason people are not applying is because they are unaware of it or they are afraid to look for it, but many more people could be drawing it.
A large number of people, even those earning £300 per week, could be drawing the benefit but they are not while many of those on the minimum wage are also not drawing it. I find that impossible to understand and I ask the Minister to give further consideration to how best this might be addressed.
The best feature of the budget were the increases in child benefit of £25 per month for the first and second children and £30 per month for the third and subsequent children. It would be even more impressive if it could be taken at face value as an honest attempt by the Government to honour its commitments under the PPF and reduce child poverty. There are other points of merit in the budget and on Committee Stage I will elaborate on my other concerns.
I am pleased to have the opportunity to speak on this Bill. I welcome the increases in social welfare benefits. The Minister was applauded by his backbenchers. It is rare for a person who is still alive to be praised so highly.
Fine Gael will not vote against any of the social welfare increases but we will vote against the raiding of the social welfare fund.
How would the Deputy fund the increases?
The Government made a commitment in its general election manifesto that the fund would not be raided. It has broken that commitment.
Will the Deputy tell the public how Fine Gael would fund these increases?
I welcome the changes in the family income supplement. Will the Minister explain why the self-employed are not to be included? Does he consider that the Revenue Commissioners cannot be trusted? The farm assist scheme is a farce as far as farmers are concerned.
The IFA said it was its greatest ever achievement.
Carlow-Kilkenny): Members are pressed for time but if the Minister continually interrupts no progress will be made.
The scheme is a farce. Whatever Tom Parlon might say, members of the IFA have made their views very clear. There have been no increases in the numbers of farmers covered by the scheme even when those who transferred from the widows' and disability schemes are included. Some 40,000 farmers have been on the streets seeking their inclusion in the scheme, yet only approximately 8,000 are covered.
Widows under the age of 65 years are still not entitled to the free schemes. Widows or widowers who were in receipt of carer's allowance before the death of their spouse are no longer eligible for it because they are not allowed receive two social welfare incomes. That is totally unacceptable. It means that a widow on a contributory pension can take up another job but is not allowed to care for a relative.
The social welfare provision for those on short-term unemployment assistance is insufficient to cover increases in the cost of petrol, diesel, refuse collection and rents. The Minister has deducted money from people who had to leave this country years ago, such as pensioners in the UK. It is why he has been able to provide for others in this Bill but it is very unfair to those who were forced to leave.
Government backbenchers have been very anxious to reassure themselves that this is a good budget. It is a reasonable one. Before the Minister kills himself with laughter I will make a couple of points that might serve to chill his ardour as he meanders his way across the County Louth countryside when travelling home tomorrow. Over the four and half years since the Government took office, inflation, at approximately 20%, has been much higher than previously. The social welfare increases will not do much to ameliorate that.
Social welfare benefits have increased by 50% in the period.
When Fianna Fáil was in opposition it codded the old age pensioners by promising to increase their pensions to £100 per week. However, it took five years to achieve increases that would have been introduced in any event. The former Rainbow Coalition Government has been much maligned this week but such criticisms are an indication of the success of that Government, which this Administration is trying to ape.
We are not aping the Deputy.
I ask the Minister not to repeat what is being proposed in this budget. The public knows that the budget means live today and pay tomorrow.
Let the record show that Deputy Durkan and his party want to give people less.
The Government is telling people that while it may give them increases this year they will be taken back with interest next year. It is being suggested that the increases will be paid from 1 January. That is not the case because they are being paid retrospectively. I suspect that had something to do with an impending general election. It might have been considered to be a great idea to backdate payments under the guise that they could not be introduced from 1 January because of the transition to the euro.
The Minister should measure the social welfare increases of the past four and half years against the price of the average shopping basket. In that period some prices, such as house prices and rents, have doubled. What impact has that had on the social welfare increases? I did not hear Members on the other side of the House claiming responsibility for the price increases and I do not expect the Minister to write to social welfare recipients advising that the increases granted are a sleight of hand.
The Deputy has sent out notices claiming credit for what the Government has done.
The Government is not telling social welfare recipients that because of price increases they are worse off than they were four years ago.
The Minister will have his opportunity to reply. I call Deputy Michael Collins.
I wish to share time with Deputy Cecilia Keaveney.
Is that agreed? Agreed.
I was surprised to hear Deputy Durkan blaming the Government for increases in prices and house rents. I always understood an increase in house rents depended on the amount of income to the household, so the Government can hardly be blamed.
This Bill provides for increases in the rates of social insurance and social assistance payments and improvements in the family supplement scheme as announced in the budget last week. Before referring to the specific changes which have been brought about by means of this Bill, I would like to refer, in broader terms, to this Government's commitment to helping the less well off and disadvantaged in our society and to put a few key facts on record. This Government has made the largest financial increases to social welfare programmes in the history of the State and has focused on the needs of our pensioners, parents, children and carers. It is important to consider the performance of the Government not only in light of this budget but in the context of the five budgets it has introduced. Social welfare reform and the financing of social welfare initiatives are an important element in this Government's action programme.
Reforms of the social welfare system have been matched by income tax reform which has dramatically improved the position of low and middle income earners. Nobody in Ireland now pays tax at the higher rate until he or she earns more than £22,000. No income tax is payable until one earns £165 pounds per week. This Government has ensured that a further 68,000 people have been removed from the tax net as a result of the changes which have been brought about in last week's budget. This Government has also reduced the standard rate of tax from 26% to 20% and the higher rate has been reduced from 48% to 42%. Overall, therefore, tax rates have been reduced by 12 percentage points during the term of this Government compared to the 1% reduction introduced by the rainbow Government.
The Government is committed to helping the elderly in our society. In June 1997, the old age contributory pension was £78 per week. As a result of the five budgets introduced by this Government, the old age contributory pension now stands at £116 per week. Personal rates of widow or widowers contributory pension and deserted wives benefit for those aged over 66 years of age are being increased by £12 per week as part of a phased increase in these payments to the same rate as the old age contributory pension. A special increase of £9.56 is being provided for in the rates of short-term unemployment assistance and supplementary welfare allowance to bring these benefits in line with unemployment benefit, disability benefit and long-term unemployment assistance payments rates. Increases ranging between £8.06 and £9.06 per week are also being provided in the rates of qualified adult allowances for people aged under 66 years of age. The increases in respect of qualified adults aged under 66 years whose partners are in receipt of the old age non-contributory pension or invalidity pension is £9.00 per week. All these increases will take effect from the first week in January 2002.
This Bill also gives effect to the PRSI changes which were announced by the budget. Section 5 provides for the reduction of 1.25% in the higher rate of social insurance contributions payable by employers. It also provides for an increase in the earnings ceiling up to which social insurance contributions are payable by employers from £28,250 to £30,510. These changes will certainly help to reduce the level of PRSI contributions which employers have to make.
The Government has done a great deal to help carers in our society. It is not only in this budget that increased benefits are being given to carers. Their needs have also been addressed in previous budgets which this Government has introduced. The personal rate of carers allowance is being increased from £88.50 to £96.56. If a carer is caring for more than one person, this rate of financial support is increased from £132.80 per week to £144.83 per week. The annual respite care grant is also being increased to £500. It is difficult to distinguish between different classes of beneficiaries in terms of who deserves more financial State support but, undoubtedly, we all agree that the role of carers in our society is a very special and important one and carers are deserving of substantial financial assistance. In welcoming the changes which have been brought about by the budget of last week with regard to the carers allowance, I would like to pay special tribute to the Minister for Social, Community and Family Affairs, Deputy Dermot Ahern, who has promoted the needs of carers in our society at every opportunity.
This Government has substantially increased the level of child benefit since it came to office. In September 1997, the level of payment available for child benefit was £30 for the first and second child and £39 for the third and subsequent children. As a result of changes which have been brought about by this Government, payments are now £92.50 for the first and second child and £116 for the third and subsequent children. Nobody can deny that these are substantial increases over the lifetime of this Government. It is only right and proper that the needs of all our children are catered for and this Government has done much to ensure the welfare of our children is fully protected. In this budget, there were increases in the back to school clothing and footwear allowances. Last year, the Government broadened the availability of the free schemes programme.
As a result of the changes announced by the Government, the allowances for electricity-gas, televisions and telephones were extended to all people over 70, regardless of their income or who lives with them. This year, a new household benefit scheme is being introduced to streamline the existing electricity and telephone allowance and free TV allowance into one combined package. This will ensure anyone who qualifies for one benefit will get all of them. This is a very sensible and welcome move.
The changes announced by the Minister for Finance are fair and balanced. They protect the interests of the less well off and the disadvantaged in our society while ensuring that low and middle income earners receive substantial tax reductions. The budget helps parents and children, carers and pensioners. This is a caring Government and, over the period of five years it has greatly helped those in need and improved the quality of life for all our people.
I welcome this brief opportunity to commend the Government and, particularly, the Minister for Social, Community and Family Affairs, Deputy Ahern, on the provisions of the budget and the achievements of the past five years. There was much laughter on the Opposition benches when the Minister for Finance, Deputy McCreevy, introduced his 1997 budget as the first of five. The laughter was rather depleted in the second and third years, there was scarcely a giggle in the fourth year and, by the fifth year, the reaction was more like panic. The Deputy Leader of Fine Gael had prepared a speech geared towards anticipated borrowings of £500 million, which did not happen. He was flummoxed at that stage. Deputy McDowell was probably going on the same lines, hoping the Government would resort to borrowing. He had issued a press release on 2 December in which he proposed taking £815 million from the national pensions reserve fund and spend £5.5 billion. He then had the cheek to criticise the Government, a few days later, for transferring a much smaller amount from the social insurance fund to the Exchequer. It is very easy for people to criticise the budget by claiming the allocation for one area or another was not adequate.
Last year's budget package was supposed to be incredible and it proved to be, but on this occasion the Minister has achieved a budget package of £850 million in a full year which is on a par with last year. At a time when one Opposition party believed we should borrow while the other said that we should not rob Peter to pay Paul but that there was no other way to proceed, it is incredible that, in light of recent events, the measures outlined in the Social Welfare Bill are as good as could be expected.
I am glad the Minister has again given priority to pensioners and people in need. Despite Opposition protests to the effect that we have not dealt with the less well off, even members of the media accept that the facts speak for themselves in that regard.
I commend the Department of Social, Community and Family Affairs and the Minister on the standard of information provided. The establishment of a budget hot line by the Department was commendable. If a number of other Departments were as user-friendly as the Department of Social, Community and Family Affairs, things would be great.
I welcome the fact that we are delivering on promises given in respect of child benefit payments. I was first elected to the Dáil in the year the rainbow coalition introduced its last budget in which was granted a huge increase of £1 per month in child benefit payments. The weekly increase of 25p would not buy a bar of chocolate in 1997 and it was a great scandal that such a small increase was given. The £1 rise represented an increase of 3.4% whereas the Government is giving an increase of 37.1% this year.
Deputy Durkan referred to a figure of 20% for inflation, perhaps in an attempt to rub salt into the wound.
It is 100% in some cases.
Under the rainbow Government old age contributory pensions rose by 9.8% whereas under this Administration they have risen by 48.7%; old age non-contributory pensions were increased by 10.6% and 56.3% by the respective Administrations, widow's contributory pensions rose by 10.2% and 36.5%, respectively; invalidity pensions rose by 10.5% and 40.3%, respectively, carer's allowances rose by 15.6% and 37%, respectively, unemployment benefit rose by 10.6% and 38.6%, respectively; payments to those on short-term unemployment rose by 11% and 43%, respectively, and payments to those on long-term unemployment rose by 10.6% to 38.6%, respectively.
There has been a 100% increase in rents and house prices.
There is a stark contrast between the figures I have outlined and the figure of 20% in respect of inflation to which Deputy Durkan referred.
Deputy Durkan stated that these increases would have been given in any event. Christmas came and went on many occasions when the rainbow Government was in office but people were not given many presents.
What happened to the Christmas bonus for social welfare recipients when Fine Gael were in office? Money is tight this year but the Government has retained the 100% Christmas bonus.
What happened when Fine Gael—
And the Labour Party.
—was in Government? The bonus was reduced to 70%.
It was 65%.
I apologise, Minister.
I am overcome with emotion.
This year, 800,000 people will benefit from the 100% Christmas bonus. Those in my constituency are happy to receive such a large bonus. Santa is bringing increases that are positive in nature and worth commending.
I was amazed by Deputy Hayes's complaints about the increase of 12 in the rates of short-term unemployment assistance and supplementary welfare allowance. The Deputy roundly condemned the Government for this, but in his pre-budget submission he suggested that the rates of payment for these allowances should rise to £94. The increase given by the Government will bring the rate to £93.56. Perhaps Deputy Hayes believes that a great deal can be done with 44p. He must accept that the Government is not far off meeting the target he set.
A great deal more could be done for widows. However, Deputy Hayes has a problem with the fact that widows will receive a large increase in their payments on this occasion. Fine Gael proposed an increase of £10.90, whereas we have given them an increase of £12. It is scary that the Deputy should criticise an increase which improves on the proposal put forward by his party.
The Minister is visibly moved by the degree of adulation aimed in his direction.
The Government has also given a £10 increase for pensioners and a £20 increase for pensioner couples, which is a worthwhile development.
Some people might say carers have got nothing from the budget or from the Government. However, the Government has done a great deal for carers since entering office. I accept that there is much more to be done. One of the most important developments in this area was the introduction of the respite care allowance. Continuing to provide increases in carer's allowance will be a priority for the Minister when he returns to office for a further five years in June.
I welcome the increases in carer's allowance of £10 for those over 66 and £8 for those under that age. However, I want to see continuing increases in respect of the income disregard for the means test. I am glad there will be increases of £25 in respect of the income disregard for single people and £50 in that for married couples. Carers, widows and pensioners deserve our support and they have received such support during the Government's term of office. They can rest assured we will continue to focus on their needs when we are returned to power.
A number of Opposition Members referred to the dates for payment increases. When the rainbow coalition was in Government, June, September and October seemed to be very popular months in which to grant increases. However, the current Administration has brought forward payment dates to January and February. Many people have complained that increases in the price of petrol are imposed immediately but that this is not the case in respect of increases in social welfare payments. I would like all increases to have been granted from 1 January. However, 275,000 people will receive increases in their rent allowance, family income supplement payments, carer's benefit, disability benefit, disablement benefit, back to work allowance, farm assist payments, unemployment assistance, unemployment benefit and pre-retirement allowance in January. In mid-February, a further 275,000 will receive increases in respect of their carer's allowance, one parent family payments, deserted wife's allowance, invalidity pension, widows' and widowers' pensions and orphan pension allowance. At the same time, increases will also be granted in respect of disability allowances, back to work allowances, pre-retirement pensions, old age contributory and non-contributory pensions and blind persons' pensions. Payment increases are now implemented well in advance of the dates on which they used to come into effect in the past. That is only right and proper and I commend the Minister on it.
He is visibly moved.
Deputy Crawford referred to family income supplement. The rate of payment for this supplement has been increased again by £26.95 per week. I am familiar with many families who avail of these payments. FIS is extremely important to people in my constituency and I am glad the thresholds relating to it are being improved.
Earlier, I commended the Department on the way it has streamlined the free schemes. This is the one area which needed to be streamlined and I am glad the Minister recognised that. It is good that people who are already eligible for one free scheme and who will now be eligible for all of them will not have to fill out a raft of forms. Form-filing appears to be incredibly popular at present.
I appreciate that there has been a two thirds increase in the spend on social welfare since 1997. The facts speak for themselves in that regard. I accept that there is much work to be done. If that was not the case, there would be no need for the Government to be returned to power after the next election. The Labour Party has already informed Fianna Fáil that it does not want to negotiate with us and its members have called us by many names. I inform Deputy Quinn that I am certain of my lineage and parentage and I do not appreciate being called names. Their record in Government speaks for itself. People can see through misdirected comments.
I hope the dispute in Letterkenny has been resolved by now and I hope the Minister will comment on that when concluding the debate.
I propose to share my time with Deputy Seamus Healy.
This Bill implements the social welfare changes set out in last week's budget. The increases in the various benefits and allowances are welcome as far as they go. They could go much further and could have gone much further over the past four and half years of this Administration. Stood alone, I could welcome this Bill. However, I cannot welcome it as part of a deeply flawed budget, the fifth in a series brought to us by the Minister for Finance, Deputy McCreevy, on behalf of a Government that threw away the best opportunity in the history of the State to redistribute wealth and build our economy on foundations of real equality.
Ministers and other Government Deputies cheered the social welfare increases announced in the budget. The reality is that this State spends a much lower proportion of gross national product on social welfare than other EU countries. This State contributes 17.5% of GNP to social welfare compared to an EU average of 28.2%. A report by the European Foundation, the EU social policy research unit, published a little more than a week ago on 29 November, found this State to be fourth from the bottom of the 15 EU countries in terms of distribution of wealth. Only Greece, Spain and Portugal fare worse. A quarter of our children and one fifth of our adults are in households with less than half the average income. Some 500,000 adults in the Twenty-six Counties have basic literacy problems. The OECD has found that 26% of our young people have no useful qualification beyond junior level. This is the context of the budget and of this Social Welfare Bill. Notwithstanding the improvements, which I welcome, it is a sorry record as this Administration ends its term of office.
In my own region, the Border region, comprising Counties Cavan, Monaghan, Sligo, Louth and Donegal, we have not benefited fully as we should have been allowed to benefit from either the economic upturn of the past five years or from the elusive peace dividend. We have the highest rate of unemployment of any region. The Quarterly National Household Survey shows that unemployment in the Border region has jumped from 5.5% to 6.8% this year. This is more than twice the rate of unemployment in the Dublin region. If this trend continues, it will be an unfortunate reality that the welfare payments covered in this Bill will be of interest to many more people in the Border region in the months ahead.
Turning to some of the specifics of the Bill, I must express disappointment at the inadequate £8 per week increase for people in receipt of a whole range of payments, including one-parent family payment, invalidity pension, blind person's pension, carer's allowance, carer's benefit, disability benefit, unemployment benefit, unemployment assistance, pre-retirement allowance, farm assist and widow's and widower's non-contributory pension. The fuel allowance increase of £2.09 per week is an insult. After four years of scandalous neglect, the increase deserves disdain, and the low level of weekly payment still does not even reach the price of a bag of coal. In our pre-budget submission we in Sinn Féin called for the basic social welfare rates to be increased by £14 per week. It could and should have been done. Instead, corporation tax was reduced from 20% to 16% at a cost of 329 million in a full year, and the top rate of employer's PRSI was reduced to 10.75% at a cost of 347 million in a full year.
We cannot look at the social welfare increases in isolation. It is those who are dependent on social welfare who are among the worst affected by the housing crisis, to give but one instance, and the crisis in our health service, to mention another. There was no new initiative on housing in this budget, but there was a bonus for property speculators and landlords. It is quite scandalous that the Government has restored interest relief on rented residential property and reduced stamp duty rates for investors. This will worsen the housing crisis by increasing property prices. In the meantime this Government has totally failed to protect tenants from rising rents and the growing rate of evictions.
Social welfare recipients, the low paid, those in need of housing and those dependent on our public health system all could and should be in a much stronger and more secure position as we face into what may well be a prolonged downturn in the economy. We hope that will not be the case. However, this Government has ensured that the prosperous years have benefited the well off most while the ordinary citizen is once again left behind. The welfare of the people demands that such policies and the Government which pursues them should be rejected.
This has been a budget of lost opportunities, a budget that discriminates as usual against the less well off in society. It directly attacks jobs in the cider industry in Clonmel. The budget could be described as one for bookies, builders, employers and landlords. Low paid workers will benefit to the tune of about £2 per week from this budget, an increase that will be wiped out immediately by the increase in VAT from 20% to 21%.
The social welfare increases are welcome, but this is the fifth year in a row that this Government has failed to give priority to the deprivation being experienced by the poorest people in society. This has happened while the country has been experiencing its most prosperous period ever. The choices that have been made have produced a situation where the poorest people are expected to live on £93.56 per week and the gap between rich poor, that is between a long-term unemployed person and someone earning £40,000 per year, has been increased again this year from £159 to £191, a widening of the gap by £32 per week. As a direct result of this Social Welfare Bill and the budget, the number of people living in relative income poverty will continue to increase and the gap between rich and poor will continue to widen. These same people, many of whom are in low paid employment, will have little or nothing to gain and will not even get the benefit of a medical card which was refused in this budget. Large numbers of people will continue to wait for accommodation on housing waiting lists throughout the country. Despite the unprecedented prosperity of recent years, poverty and social exclusion have not been tackled on anything like the scale that was possible, given the huge available resources that this Government has had at its disposal over the past five years. The most important requirement for tackling poverty is the provision of sufficient income to enable people live with dignity. This Government has failed dismally in relation to that: £93.56 simply does not allow a person to live with dignity.
I want to refer to the carer's allowance. The Minister has again missed an opportunity to do something for carers in this budget. Carers asked in their pre-budget submission for a non-means-tested payment and for the payment of the carer's allowance in addition to the social welfare payment being received by the individual. We still have a situation where a husband caring for his wife or a wife caring for her husband are not in receipt of any payment despite the fact they may be caring 24 hours a day. There are about 150,000 carers here and many who are in that situation will not get a single farthing as a result of this budget. Those who happen to be in receipt of an adult dependant allowance on the basis of the husband's payment will benefit by £25-£30 per week at most. Neither I nor the Carers Association accept that it is sufficient reward for people who care for others on a 24 hour basis. I urge the Minister to look at it again, to ensure that the carer's allowance payment is not means tested and to allow it to be paid in addition to other social welfare payments.
The child dependant allowance has not been increased since 1996. While everybody welcomes the child benefit increases, they have been offset by the fact that there has been no increase in the child dependant allowance. Had that allowance been increased over the years, it would amount to approximately £26 per week instead of the £13.20 that is currently paid.
I thank the Deputies for their comments on the Bill. While I accept many of them, particularly the complimentary ones, I do not accept some of the other comments. It shows the paucity of the Opposition's strong points for criticism that they must quote, almost verbatim, from submissions made by outside groups who have a record of not welcoming anything delivered by any Government, regardless of its hue. However, I will be able to offer some decent quotes later in my reply.
A number of Deputies, particularly Deputy Hayes, referred to the benchmarking and indexation group. The group brought out a report recently which has been noted by the Government and will feed into—
Is the Minister accepting it?
—the ultimate review of the national anti-poverty strategy.
The Government has not accepted it.
The Government's view in that regard will be articulated in the national anti-poverty strategy—
In its election manifesto.
—when the review is published in the not too distant future. The recommendation in relation to income adequacy says the majority of the group considered that the target of 27% of gross average industrial earnings for the lowest social welfare payments was not an unreasonable policy objective over the period 2002-07. That would imply, in effect, an annual average increase of £9.70. This year we increased the lowest social welfare payments by £9 or 56%, which is broadly consistent with the majority recommendation of the group.
It was £8.06, Minister.
Deputies Hayes, McGrath and Broughan referred to the social insurance fund. I wish to remind them that I introduced a provision in the 1998 Social Welfare Act whereby actuarial reviews were to be carried out every five years. The first review was due to be completed by 2002 but I brought it forward to this year and my Department has engaged external consultants—
There is no legislation.
—to conduct an actuarial review of the social insurance fund for the period 2001-06. This work is already under way.
The Minister promised legislation.
Deputies Hayes and Broughan referred to carers and another Deputy said nothing was done for them. That is incorrect. Over the five years of this Administration more changes have been made in the carer's allowance and in the add ons to that allowance than under any previous Administration. I challenge any objective observer to examine it. While I appreciate that lobby groups must criticise and continually push up the bar, the reality is that I have been inundated with correspondence—
What about the White Paper?
—and telephone calls about the way this Government has addressed the carers issue over the last five years. The improvements in this Bill, which the Deputy will vote against, amount to £12.62 million in relation to the carers disregard alone. It will include an extra 3,400 carers and provide an increased payment for another 2,300 carers. Over the lifetime of this Government the number of carers in receipt of the carer's allowance will have increased from 9,000 to approximately 25,000. The amount of expenditure on carer's allowance has increased 184% since this Government came to office.
It has increased from £36 million to approximately £132 million.
A number of Deputies referred to CDAs. The Deputies have extremely short memories. The loss of CDAs by social welfare recipients can act as a disincentive to going to work. It was Deputy De Rossa who started the policy, which I accepted when I came into office, that the CDAs should be frozen.
What about widows with young children?
I have done that. The difference between myself and Deputy De Rossa is that any available resources subsequently available to this Government were put into child benefit. Massive resources were put into child benefit as opposed to the resources that were made available by Deputy De Rossa when he was Minister.
Deputy Browne raised the issue of 29 weeks of payment and continues to disagree with me about it. Over the years we were berated for announcing increases on budget day and not paying them until much later, well after the tax changes were implemented.
Fianna Fáil started that 20 years ago.
When we came to office in 1997, payments were made in the second week of June, starting on 9 June if memory serves.
The Minister's former leader started that racket in the 1981 budget.
They were announced in December so there was a huge time lag. This Government has progressively brought the dates back. For many years we were told it was unfair that people on social welfare did not get their increases at the same time as others got their tax benefits. This is the first year we have aligned social welfare increases with the tax benefit increases. Next year they will be brought back three months, from 6 April to 1 January, in one fell swoop at a cost to the Exchequer of £80 million in relation to social welfare alone.
Perhaps Deputy Browne will discuss the issue of the 29 weeks with my officials. We always work from a budgetary point of view on the basis of the calendar year. The House also operates on the calendar year. When we refer to people getting paid their 29 weeks we are basing that on the budget year. When one negotiates with the Minister for Finance there is always a debate over the full year or 52 weeks cost and the budget year cost. Ministers have finite budgets and it has been the case over the years, although thankfully not this year, that if they are particularly pressed for money, they will, to a certain extent, push out the date. Instead of introducing the change in April they might leave it to October so less money is expended between October and December.
When this Government came to office the increases were only paid for 29 weeks of the budget year. This year they will be paid for 52 weeks of the budget year. It will be an additional cost but it will be an advantage to social welfare recipients. Apart from the percentage increase in their existing payments which is announced in the budget, the fact that they will be paid for an extra 23 weeks amounts to, on average, an extra increase of between 4% and 5% in their annual income.
Deputy Broughan referred to the level of increase in the qualified adult allowance. The qualified adult allowance for a person over 66 years of age has increased from 72% of the old age contributory pension in 1997 to 77% in 2002—
What about the long-term unemployed?
—and now represents 85% of the old age contributory rate. These increases make further progress towards the achievement of the commitment to bring the QAA to 70% of the appropriate personal rate. All QAAs are now at least 66% of the appropriate personal rate.
It is £62.
Deputies Hayes and Broughan referred to the widening poverty gap between the rich and the poor. I reject that totally.
It is the reality.
The review of the national anti-poverty strategy is nearing completion. That review will be the basis for action as far as this Government is concerned. In the PPF, the Government committed itself to spending £1.5 billion on social exclusion over a two-year and nine-month period. In our first budget under the PPF last year, we spent £1.3 billion. We are way ahead of the commitment on social inclusion that was made under the PPF. It is interesting that some Members made play of the fact that lobby groups were saying there was not enough in the budget. There is ESRI research published today in the newspapers. I challenge any Deputy on the far side of the House to read that.
We will have a look at it.
The Deputy should read it. It says the impact of this budget is highly progressive, favouring people on the lowest incomes. The facts speak for themselves.
One budget out of five only.
Deputy Durkan said the CPI has gone up by a certain percentage. Any objective examination of how the CPI has gone up, and how social welfare increases have gone up in comparison, will show that when this Government has been in office there have been real increases in social welfare.
That was last year. The Minister barely got it.
Some Deputies referred to the timing of the payments. The timing is related to the printing of the books. No-one will lose out as a result. Everyone will get their arrears in mid-February. That is six weeks earlier than the budget increases last year. It will be a cost to the taxpayer of £80 million but a benefit to the social welfare recipient.
How close will that be to the election?
The essential point is that the increases will be effective from the beginning of January in all cases. That is earlier than ever before. Some Members have made great play of the fact that a part of this Bill takes money out of the social insurance fund. This fund was established 48 years ago. The taxpayer, over those years, has made a contribution of £11 billion. It is not unreasonable that there be a transfer of a small portion of that £11 billion back to the taxpayer. Are people who criticise the Government for this move saying that we should borrow to fund—
The Deputy's party did. It was in favour of borrowing.
I am not in favour of borrowing.
The Labour Party finance spokesperson is in favour of borrowing. The Deputy is washing his hands of his spokesperson. The Deputy should get his story right. On Second Stage, I challenged the Opposition parties to say exactly how they would fund the £850 million package.
The Minister is trying to make things up.
Are they saying we should go back to the period when they were in office and only gave £1 child benefit as opposed to the £25 under this Government?
I told the Minister last night.
Are the Opposition parties saying we should go back—
It was Fianna Fáil that started borrowing.
—to the time when they gave a miserly £1.50 to old-age pensioners as opposed to the £10 this year and £10 last year that this Government has given?
We will see what our new Government will give next year.
Are they saying we should raid the old-age pension fund? All indications show that the social insurance fund will continue in cumulative surplus for the next ten years. There will be £3.4 billion in the year 2004. There will be a surplus next year of £1 billion despite taking £500 million out of the fund.
The Eircom shareholders are waiting in the long grass for this Government.
Do the Opposition want us to go back to a time when social welfare recipients were getting paltry increases?
That was Ray MacSharry.
What about Deputy Dick Spring?
I will mention some of those increases. In 1995, the Rainbow Coalition gave each widow £1.60. The next year they gave £2, and £3 in the next year.
The Minister is obsessed with history.
The big difference came when this Government entered office. What has been said about the budget by the Combat Poverty Agency and people with disabilities is illustrative. I refer again to the ESRI statement in the newspapers today. It says that the impact of the budget for 2002 is highly progressive, favouring those with the lowest incomes. The largest gains are for those depending on social welfare.
One budget out of five. It is not great.
As usual, the Labour Party is speaking out of both sides of its mouth. It says the social insurance fund is sacrosanct while having a policy to raid the pensioners' fund. Fine Gael is attacking Fianna Fáil on the social insurance fund but forgetting that not only have we a surplus in the fund, even when we take this money out, but that this is because of the management of our economy by this Government over five years.
No. It is because this Government squandered the money over the years. That is why it is raiding the fund.
There will be more than £6.3 billion in the pension reserve fund next year. There will be Deputies on the far side of the House who will leave here today after voting "no" and go to their constituencies to put out leaflets on these social welfare increases to say what great people they are. Shame on the hypocrites on the far side of the House.
Ahern, Bertie.Ahern, Dermot.Ahern, Michael.Ahern, Noel.Andrews, David.Ardagh, Seán.Aylward, Liam.Blaney, Harry.Brady, Johnny.
Brady, Martin.Brennan, Matt.Brennan, Séamus.Briscoe, Ben.Byrne, Hugh.Callely, Ivor.Carey, Pat.Collins, Michael. Cooper-Flynn, Beverley.
Coughlan, Mary.Davern, Noel.de Valera, Síle.Dennehy, John.Ellis, John.Fahey, Frank.Fleming, Seán.Flood, Chris.Foley, Denis.Fox, Mildred.Gildea, Thomas.Hanafin, Mary.Haughey, Seán.Healy-Rae, Jackie.Jacob, Joe.Keaveney, Cecilia.Kelleher, Billy.Kenneally, Brendan.Killeen, Tony.Kirk, Séamus.Kitt, Michael P.Lenihan, Brian.Lenihan, Conor.McCreevy, Charlie.McDaid, James.
McGennis, Marian.McGuinness, John J.Martin, Micheál.Moffatt, Thomas.Molloy, Robert.Moloney, John.Ó Cuív, Éamon.O'Dea, Willie.O'Donnell, Liz.O'Donoghue, John.O'Flynn, Noel.O'Keeffe, Batt.O'Keeffe, Ned.O'Kennedy, Michael.O'Malley, Desmond.O'Rourke, Mary.Power, Seán.Roche, Dick.Smith, Brendan.Smith, Michael.Treacy, Noel.Wade, Eddie.Wallace, Dan.Woods, Michael.Wright, G. V.
Allen, Bernard.Bell, Michael.Belton, Louis J.Bradford, Paul.Broughan, Thomas P.Browne, John (Carlow-Kilkenny).Bruton, Richard.Burke, Ulick.Carey, Donal.Clune, Deirdre.Connaughton, Paul.Cosgrave, Michael.Crawford, Seymour.Creed, Michael.Currie, Austin.D'Arcy, Michael.Deasy, Austin.Durkan, Bernard.Enright, Thomas.Farrelly, John.Finucane, Michael.Fitzgerald, Frances.Flanagan, Charles.Gilmore, Éamon.Gormley, John.Gregory, Tony.Hayes, Tom.Healy, Seamus.Higgins, Jim.Higgins, Joe.Higgins, Michael.
Hogan, Philip.Kenny, Enda.McCormack, Pádraic.McDowell, Derek.McGahon, Brendan.McGinley, Dinny.McGrath, Paul.McManus, Liz.Mitchell, Jim.Moynihan-Cronin, Breeda.Naughten, Denis.Neville, Dan.Ó Caoláin, Caoimhghín.O'Keeffe, Jim.O'Shea, Brian.O'Sullivan, Jan.Owen, Nora.Penrose, William.Perry, John.Quinn, Ruairí.Rabbitte, Pat.Reynolds, Gerard.Ring, Michael.Ryan, Seán.Sargent, Trevor.Shatter, Alan.Shortall, Róisín.Stagg, Emmet.Timmins, Billy.Wall, Jack.
In accordance with Standing Order 111(2), I declare the Bill to be read a second time. I understand it is proposed to refer the Bill to the Select Committee on Family, Community and Social Affairs.