Vol. 549 No. 3
29 Mr. B. Hayes asked the Minister for Social, Community and Family Affairs the measures he intends to put in place to counter the effects of price rises which social welfare recipients have faced since the introduction of the euro; and if he will make a statement on the matter. [6432/02]
As the Deputy is aware, the consumer price index is published on a monthly basis by the Central Statistics Office.
The latest published CPI report relates to December 2001. It highlights that the average annual rate of inflation for 2001 was 4.9%, down from the average for 2000, which was 5.6%. The CPI for January will be published later this week.
It is projected that the average rate of inflation in 2002 will be 4.2%. Budget 2002 provided for substantial increases in all personal and qualified adult social welfare rates as well as for child benefit. The level of increases represent real increases, well ahead of projected inflation for 2002.
Among the significant increases in the budget are: increases in weekly personal rates of payments of between 7.4% and 11.8% – this represents significant real increases, ahead of projected inflation; and increases in weekly rates of qualified adult allowances of between 12.6% and 14.9%. This too represents real increases ahead of projected inflation.
Furthermore, these increases applied from the beginning of January. This means that in 2002, those receiving social welfare payments will receive their increase 23 weeks earlier in the budget year than when this Government came into office.
I am also providing once again for record increases in child benefit, thereby continuing our policy of record investment in children. These increases, payable with effect from April are from 37.1% for each of the first two children to 34.9% for the third and subsequent children. This comes on top of increases of 59% and 54%, respectively, in 2001.
The Government has delivered substantial increases for all social welfare clients during its period in office. These increases, announced in the recent budget, not only fully protect all recipients from projected inflation in 2002 but provide substantial real improvements in their standard of living.
I thank the Minister for his reply. He has already admitted to the House that we do not yet have the figures on protected rates of inflation for January and February. Is the Minister oblivious to the fact that, since the introduction of the euro, many people on social welfare have seen a drastic reduction in their living standards as a result of escalating prices? Is he not aware of the report from the Consumers' Association of Ireland that shows an increase of around 15% in terms of many foodstuffs, medical costs and services? Is he not aware that many low-income families, particularly those dependent on social welfare, have been ripped off as a result of the euro? Is the Government considering any additional measures over the coming months to compensate people for the loss of their real income as a result of the introduction of the euro?
As I said in my earlier reply, the record increases we delivered this year and last year were twice the rate of inflation and well ahead of the growth in average industrial earnings. That has been the case for several years. There is no evidence to date whether prices have gone up because of the introduction of the euro.
The Deputy should look at a shopping list.
The report of the Consumers' Association of Ireland indicates that there will be, perhaps, a 1% increase in inflation by the year's end, but the Central Bank does not accept the CAI estimate.
I compliment my colleague, Deputy Tom Kitt, Minister of State at the Department of Enterprise, Trade and Employment, who has asked Forfás to carry out an immediate study of the prices and to report back as soon as possible on the implications of the introduction of the euro.
It is worth emphasising that the increases in social welfare during this Government's term of office have been record increases. Over the term of its office, old age pensions have increased by 50%—
The Minister is not answering my question.
—24% ahead of the rate of inflation and 7.4% ahead of the increase in average industrial earnings. Old age non-contributory pensions – the means-tested pensions – have gone up by 56%, a real—
The Minister should answer my question.
I am speaking in terms of inflation.
The Minister is not.
The Deputy might not like the answer.
The Minister is in possession.
In respect of people on non-contributory pensions, there was a 30% increase over CPI and a 12.9% increase over average industrial earnings. Similarly, in terms of long-term unemployment assistance, the rate of 38% is way above inflation and way above the rate pertaining to average industrial earnings – 15.5%. I rest my case.
The Minister is clearly not in possession of the facts concerning the difficulty experienced by many low-income families since the introduction of the euro. Is he aware that there has been a considerable escalation in food prices, medical costs and costs of many other services throughout many different sectors of our economy? Those on the lowest incomes and those who depend on social welfare have been severely hit as a result of those increases in prices.
Will the Minister carry out a study or a random survey on a sample of maybe 1,000 or 5,000 social welfare recipients to assess the impact of the introduction of the euro on their weekly and monthly living standards, in conjunction with Deputy Tom Kitt, who has asked Forfás to carry out this work? That would be a much more useful and productive way to spend moneys within his Department, as against the self-promotion that he engages in from time to time. Will he consider that proposal and report back to the House? Despite the Alice in Wonderland depiction that he gives to the House, the reality is that many low income people and those dependent on social welfare have been badly stung as a result of the introduction of the euro, something he is unaware of and about which he does not want to do anything.
The Minister does not shop.
I am not—
He lives in a cocoon.
—saying I am unaware of what is happening in the real world. To date, there is no official indication of whether there has been an increase. The Minister of State, Deputy Tom Kitt, has instigated the examination by Forfás, which will, in effect, be the definitive one. In terms of the CIA estimate, the issue of health costs is referred to. That will be investigated by Forfás.
The vast majority of people on social welfare would be in receipt of a medical card so the increase in medical costs would not impact upon them in that respect. In terms of any survey that could be carried out by Forfás, my Department would be very helpful. During the lifetime of this Government, social welfare recipients' increases have been way ahead of any inflation—
(Carlow-Kilkenny): Here we go again.
We were talking about January and February.
We will take Question No. 30.
—that has taken place during the lifetime of this Government. I refer to the figures that I gave earlier.
