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Dáil Éireann debate -
Wednesday, 11 Dec 2002

Vol. 559 No. 2

Social Welfare Bill, 2002: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

The Social Welfare Bill gives effect to the social welfare changes announced in last week's budget. I have sat in this House listening to the moral righteousness of representatives of Fine Gael, the Labour Party and Sinn Féin. These people have tried to portray Fianna Fáil as some form of right wing, conservative, Keynesian cabal.

What about the Deputy's views on immigrants? How would he class them? He is just like Enoch Powell.

The reality is that successive Fianna Fáil led Governments have introduced innovative and radical changes in the welfare system.

The improvements in social welfare in this year's budget will cost €530 million. In stark comparison, the rainbow Government provided €272 million in its last budget in 1997. Social welfare expenditure next year will be double the level set by Fine Gael and the Labour Party when last in Government. As a result of the changes in last week's budget, social welfare increases will be paid on 1 January, five months ahead of the payment date when Fine Gael, the Labour Party and DL left office.

Does the figure £1.78 ring a bell? That is how much the DL Minister for Social Welfare in the rainbow Government, Proinsias De Rossa, or Frank Ross as he is also known, gave to pensioners, just as the Irish economy was ready to boom. The Opposition claims it is responsible for economic success but it could only give a miserly £1.78 to old age pensioners. It was a shameful pittance. All of our budgets have been characterised by measures designed to improve the position of older people's pensions.

In 1997 we promised to increase old age pensions to at least €127 per week during the term of the last Government and we delivered on this commitment. At the last election we promised to increase the State pension to €200 per week while in Government and we will deliver on that commitment. This budget puts us in a position to deliver, providing a €10 increase in the full rate of old age and related pensions. Frank Ross gave old age pensioners an average increase over three years of €2.95.

Obviously the Deputy does not like Irish. Its restoration is not one of his national aims, no matter what his party says.

In contrast, the average increase to pensioners under Fianna Fáil stands at €9.71. The effect of the increases under Fianna Fáil is that the rate of the old age contributory pension is now €157.30 per week. That is an enormous increase on the €99 per week which was payable on the day Fine Gael and Labour left office. The old age contributory pension this year has been increased by 6.8%, well ahead of inflation unlike the rainbow Government increases which were below the rate of inflation.

I have met several hundred old age pensioners over the past two weeks due to the round of Christmas parties. I am sure all public representatives are receiving invitations to senior citizen parties. Not one pensioner I met had anything bad to say about this Government with regard to the social welfare increases he or she received over the past five years.

What about the drugs refund scheme?

It is covered by the medical card.

They are thrilled with and appreciate the increases, and the fact that the Government appreciates what they have done throughout their lives in developing and supporting this country. They have asked that the Minister come to see them in Cork. I would like to see her visiting old age groups in my constituency and would appreciate such a visit in the new year. Pensioners are anxious to meet the Minister to thank her for the care and consideration she put into her part of this year's budget.

Fianna Fáil in Government has always placed the family at the centre of its policies. It has always aimed to protect and support the family. In its period in office, the party has more than trebled the payment rates of child benefit.

Will the Government tax child benefit?

The Deputy had a chance to speak a minute ago.

I am sorry, it is such waffle.

In the 2001 budget, the Government announced its intention to invest an extraordinary €1.27 billion in increased child benefit over a number of budgets. Two-thirds of that increase was achieved in the last two years. This year, an additional €105 million was announced in a full year to increase child benefit further. Child benefit rates will increase by €8 per month for first and second children and by €10 per month for third and subsequent children. When Fianna Fáil returned to Government in June 1997, child benefit was payable at €38.09 per month for first and second children and €49.52 per month for third and subsequent children. It will now be payable at a staggering €105.60 for first and second children and €157.30 for third and subsequent children. That is an achievement this Government targeted five years ago and is continuing to deliver on.

I am delighted the widow's pension has increased by €11 because, as Members will agree, widows have been neglected for many decades. Many widows have had to raise families on smaller weekly incomes than pensioners had. I realise that there could be a legal problem with regard to widows' pensions and the position of a widower compared to a single person.

A commitment to do something about it is needed, not a law.

I am delighted – I am sure Deputy Ryan will agree – that this pension has increased significantly because it is an area that has been neglected for a long time. I urge the Minister to continue to support widows and widowers in the years ahead.

Before the budget, I received a phone call from an active carer who was concerned that carers would not get a significant increase in the budget. I received another phone call from the same person shortly after the budget to say that something had been done, that the carer's allowance had been increased by €10 per week plus the grant, and that the carer appreciated the Government's recognition of the work of carers. Many people have chosen to care for their wives, husbands and partners because of illness, a need for full-time care and a desire not to put loved ones into full-time hospital care or a nursing home.

The work of carers must continue to be recognised. Some have given up their life's work to care for their partners because they would not allow somebody in an institution to do that. We must continue to expand, develop and increase the resources available to carers. In the long run, this will mean that the Exchequer will not need to put billions of euro into the health care system to care for people who need 24 hour care. A great debt of gratitude is due to the many thousands who care for people in the family home. That is recognised this year but I would like to see the measures go further.

I am delighted that under the Social Welfare Bill, 2002, new powers will be given to the Department in its fight against social welfare fraud. Under the Bill, social welfare inspectors accompanied by gardaí will be able to stop vehicles suspected of being used for work while persons are claiming social welfare. I raised this matter some years ago when Deputy Dermot Ahern was the relevant Minister and I disagreed with him on the mechanism he was using. I am on record in this House as being against it but, because of a number of instances that have been brought to my attention since that period, I now see the validity and benefit of this method of trying to stamp out social welfare fraud. Those committing fraud deprive others of the benefit of the services they so richly deserve.

The Bill also contains items which have far-reaching consequences for public access to civil records of births, deaths and marriages. I am delighted that parts of the Bill include measures to bring about the modernisation and computerisation of the civil registration system, which has remained largely unchanged since the mid-19th century. My constituents in Cork must now go to Grattan Street – it is a nice new building and I thank the former Minister for putting it in place. I hope the new Minister will do great things also. People attending Grattan Street must take a ticket and queue for several hours to get a birth, marriage or any other certificate. It is good that they will now be able to access this service over the Internet.

I agree with Deputy O'Dowd with regard to the work of the Department of Social and Family Affairs and all involved in this area. In the five years I have been in this House, I have yet to find an official who was discourteous or unhelpful, or one who gave a short answer when a proper explanation was required. It must be very trying for officials to deal with the volume of work they have on a daily basis. I commend the former Minister, Deputy Dermot Ahern, for putting in place a system where public representatives were able to get quick access to officials by having the contact details of Deputies. This practice will be continued by the Minister, Deputy Coughlan. I ask her to further improve the services delivered by her Department and the speed of their delivery for the people we are all charged to serve.

I wish the Minister well in the task ahead. In the context of this Bill, I will hold my judgment until next year with regard to her performance and how prepared she is to take on the Minister for Finance and the real Government. I agree with the Minister that her greatest achievement this year was that, through her efforts and by banging her hands on the Cabinet table, she was able to prevent means testing or the taxation of child benefit. That is the extent of the real impact on this budget, but we will wait until next year before going further.

The budget is a disaster as far as social welfare recipients are concerned. In many ways it has rolled back much of the progress made in recent years in dealing with the major problem of poverty. Taxation and the social welfare policies in our budgets are the mechanisms the Government has available to it to deal with that poverty. If we accept the logic that the budget should be judged according to its impact in addressing this problem, this Bill which gives effect to its provisions should be assessed by the same criteria. After five of the most prosperous years in the history of the State, more than 6% of the population, or 200,000 people, still live in poverty. They live on incomes which are below 60% of the average and experience constant deprivation. Deprivation in this case means lacking a full warm meal every day and not having a coat to wear to protect against the elements. When I see the people who come to the Dáil getting out of their cars, leaving the train or getting off their bicycles, I often tell myself that we are not living in the real world. Yesterday people were saying how cold it was though they were wearing top coats. Yet, 200,000 of our people do not have a meal or a coat to wear.

The recent ESRI study shows that the number of people subsisting below relative income thresholds has increased compared with 1997, the year to which the Minister for Finance has consistently referred indicating that he is to be judged on the basis of his performance since then. These startling facts show, notwithstanding some improvements, that for a substantial minority things have not got better. The increasing income gap is some achievement, resulting from five years of mismanagement and implementation of ideological policies by the Government. As I listened to the Minister's Budget Statement I asked myself if this would be a good budget for people in need. The Minister stated that his main objective was to protect the weaker sections of our society. That is a joke.

What would we do without the voluntary and statutory groups and bodies who deal with the disadvantaged sectors of our society? The CORI justice commission has utterly slated the budget describing it as unfair, unjust and unacceptable.

Hear, hear.

It says that, once again, this Government has insulted our poorest people. The commission further states that the budget has dramatically failed to address the substantial poverty and social exclusion that still exists. It has increased the gap between rich and poor, a gap that is the worst in the EU despite the fact that this is one of its richest countries. We must question the direction and policies of this Government over the past five years.

In its response to the budget, Threshold stated that people experiencing housing disadvantage will be hit hard by the implications of this Social Welfare Bill and the budget. People in receipt of SWA rent supplement will have to increase their contributions from €7.60 to €12.40 per week. The miserly increase for the majority of this category of €6 per week does not take into account cost of living increases. People involved in local authorities know that those who are lucky enough to have local authority housing will not be able to meet the rent increases that are on the way with that extra money.

The Society of St. Vincent de Paul works daily with people who live in poverty. Its members are aware of the reality for the hundreds of thousands who would not be able to exist without their support. The society described choices to the Government, but they have been ignored. The social welfare package contained in this Bill is an utter disgrace. It is easy for a Minister or a backbencher to say there is to be an increase of €6, €7 or €11, but when those increases are examined in the context of the cost of living another story is told. An unemployed couple with one child is to receive an increase of €11.84 per week, as described by Government backbenchers, but inflation erodes the sum by €11.59. That family will see an actual increase of 25 cent per week. The lowest level of unemployment assistance is to increase by €6 per week which will be eroded by inflation and also become a real increase of 25 cent. Are we living in the real world?

Choices are made and it is no surprise that more than 1 million people are paying into SSIAs. They are getting returns of 25%, which one would be mad not to avail of if one could afford to. The return from financial institutions is 0.7%. It was ludicrous to introduce such a scheme when there were choices to be made that could have dealt with poverty. When there was an opportunity to deal with the poverty problem the Government was not prepared to look at the choices and improve the quality of life. The Government has failed and will be shown to have failed, and miserably so in the case of taxation and welfare.

I wish to share time with Deputy Broughan.

Is that agreed? Agreed.

I agree with my colleague. The Society of St. Vincent de Paul entitled its pre-budget submission, "Right Choices". The three Ministers who sat smugly in this House on budget day – the Taoiseach, the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Harney and the Minister for Finance, Deputy McCreevy – made the choices. They decided that the poorest in society would bear a significant part of their spending spree before the general election and would bear the brunt of what the budget set out to do. Like my colleague I have respect for the new Minister. She has been in office for nearly six months, yet in the pre-budget submissions she clearly lost the battle across a whole range of issues. Anyone who has followed the Department of Social and Family Affairs will be aware there is a much progressive thinking in the Department but it appears many of the issues which our colleagues in that Department were trying to bring forward were buried by the Taoiseach, the Tánaiste and the Minister for Finance. One of the most regrettable features of the budget is that a series of cutbacks affecting social welfare were not revealed on budget day. Yesterday we tried to come to terms with them.

For many years the voluntary and community bodies, such as the Society of St. Vincent de Paul, CORI and the Combat Poverty Agency, demanded that we set up a minimum acceptable income standard for all in society. In the recent report on this matter there is a target of €150 per week equivalent by 2007. It was obvious that to attain that basic target it would have been necessary for the Minister for Finance, Deputy McCreevy, and the Minister for Social and Family Affairs, Deputy Coughlan, to have introduced a minimum increase in unemployment assistance and the other basic benefits of at least €14 per week. We had hoped to get €14 per week but at worst €11 per week, instead of which we got an insulting, miserly and disgraceful €8. It is clear the Government has abandoned all pretence of creating a minimum income standard.

For many years the Labour Party has called for a proper poverty proofing exercise in the budget. However, in the Budget Statement there is a ridiculous Annex B, a couple of pages entitled "Examination of budget 2003 – Income tax measures using the National Anti-Poverty Strategy guidelines", which is pure fantasy. It is in a question and answer format, drawn up by some civil servant in the Department of Finance. To the question "Does the budget help to prevent people falling into poverty?" the report answers "No". In fact the budget exacerbated people falling into poverty. Neither did the budget reduce the level and depth of poverty, or ameliorate poverty. To every question posed, a nice handy answer is given. In reply to the question, "Does it increase poverty?" we are given the answer "The income tax changes do not increase poverty." It is a ridiculous exercise, with ridiculous questions to which are given ridiculous answers. It is a farce to try to pretend the budget was poverty proofed. Had it been poverty proofed the Minister would not have dared to bring this disgraceful and miserable Social Welfare Bill into the House. The core reason this is a ludicrous exercise is that the tables which examine the impact of the budget are all done in percentages. The miserable €6 is placed against €118 and we are told that the huge tranche of welfare recipients who have to live on a miserable €124 per week got a massive increase of €6 and that a person on €50,000, €80,000 or €100,000 received a great deal less in percentage terms through the miserable tax changes. The reality is that the income gap between those on €60,000 or €80,000 per annum and those on €124 per week will increase after Christmas. That is a hallmark of this Government which has created the most divided society since we got our independence in 1922. This was rightly stated by Deputy Ned O'Keeffe, a distinguished former Minister and backbencher. This is the most right-wing Government in the history of the State, as characterised by the budget and this miserable Social Welfare Bill.

He should know.

Ned would know.

He is a big farmer.

One of the most brutal miserable cutbacks witnessed yesterday was the slashing of the back-to-work scheme. This scheme was introduced by the Labour Party. Tens of thousands of workers used it over the three or four years allowed to "return to work". If one was in a partnership or disadvantaged area in an urban or rural district one got this little assistance to get back into work. The Minister has effectively ended that scheme—

It has been restricted.

I know what has been done. It has been restricted to people with five years and effectively it has been ended.

We put the people back to work; the Deputy's party had them out of work.

The Minister, Deputy McCreevy, did not have the bottle to stand up and inform the House about this or about the car tax. He also had some cheek to come into the House and not tell us he slashed funding for the money advice and budgeting service by 8% to €8 million. He did not have the bottle to tell us that and a whole series of other cutbacks. Since returning to this House – I know the Acting Chairman is new to this House and I welcome him – it is extraordinary that since the first day, we have watched a series of rolling cutbacks and an ongoing budget. We are living in the middle of a permanent cutback budget. Those we represent are paying for the suffering inflicted by the Minister for Finance, Deputy McCreevy, and this right-wing Government.

The Deputy has a short memory.

Next year inflation will be 6%. The Minister for Finance, Deputy McCreevy, increased it by 1% and he is to blame for that inflation. Who will suffer from this increased inflation? Again it will be social welfare recipients. They were slaughtered because of the price increases in 2001 in various areas. Grocery prices increased. In preparation last year for the euro being launched The Irish Times checked on prices for a month before Christmas. All the multiples and the grocery and service areas did not increase prices for a month. Following the launch of the euro in January, The Irish Times announced there had been no price increases. As soon as The Irish Times went back to D'Olier Street on the southside prices lashed up again and, once again, social welfare recipients received practically no increase for 2002. We are now facing ESB and gas price increases as well as an increase in the RTE licence fee. This budget is useless as is this miserable Bill. Why do we bother to discuss it? It is a miserable, disgraceful insult to 1.5 million of our fellow citizens and the Government should be thoroughly ashamed of itself.

They are not considered because they do not vote.

The Government does not care and it is a total disgrace.

A Government of which the Deputy's party was a member took a shilling off the old age pensioners.

It is nice to see a little passion coming from the Opposition, it proves it is alive. I am pleased to have the opportunity to speak on the Social Welfare Bill. It is an opportunity to outline in detail what the Government has done in recent years in providing for those dependent on social welfare payments right across the spectrum.

Debate adjourned.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.