Dáil Éireann debate -
Tuesday, 30 Jun 2009

Vol. 686 No. 2

Leaders’ Questions.

Deputy Enda Kenny

I will read a short quotation which states:

Competitiveness is not a vague concept. It is critical for the creation and retention of jobs . . . [Today] we are 15th out of 16 countries on prices and wages; 15th out of 16 on infrastructure; 11th out of 16 on IT; 15th out of 16 on transport; and 12th out of 16 on research . . . . Ireland is the joint most expensive country in the eurozone for consumer goods.

That quotation comes from a contribution I made in response to the budget in 2003. The legacy of this sort of mismanagement is not new, it has drifted on for a number of years now. The signs have been there but precious little has been done. Just last week, as the Taoiseach is aware, the IMF stated in its report that Ireland is the most expensive country in the eurozone.

In February the Tánaiste asked the Competition Authority to produce a report in respect of the retail-related import and distribution sector. That report was published this morning and it stated that the problem of higher costs and competitiveness is a long-term issue that needs to be addressed. It is stated in the report that this problem is within our control — that is the only phrase underlined in the entire report. It goes on to point out that tackling factors that raise the cost of doing business is the best way of ensuring that Irish retail and production sectors are capable of competing with their counterparts in Britain and beyond. That is the reality. When will we get to grips with this? It has been going on since before 2003.

In respect of the constructive suggestions made by Fine Gael, and now with the Competition Authority pointing out that the solution to this problem is within our own grasp, will the Taoiseach give me three tangible actions the Government now intends taking to restore competitiveness to what it was in the mid-1990s, when Ireland was nimble, flexible and in front? We know what the problem is and we were told today by the Competition Authority that the answer is within our grasp. I ask the Taoiseach to respond in terms of tangible and positive action the Government intends to take.

The Taoiseach

Obviously the Competition Authority report will be considered by the Cabinet when the Tánaiste presents it in due course, probably next week or the week after. The important point on competitiveness in the economy is the need to continue with the direction of policy that has been validated by people outside and domestically in terms of the need to bring order to the public finances, to look to further means by which we can control spending and to find a viable and sustainable way forward through that path primarily.

If it is the Deputy's intention to support such measures, I look forward to the support of any part of the House, because it is important that this be proceeded with in a way that enhances competitiveness. As part of that we looked at public sector pay and pensions as an important component of total and overall current expenditure and we introduced in February a pensions levy that did not win the support of anyone else in the House although it improves our position.

It is also a question of making sure we can find a way those in permanent and pensionable jobs can assist those whose jobs are at risk or who have no pensions. Finding a progressive and fair way forward is always a matter of political judgment and can be always open to criticism. Ultimately, however, there is no painless panacea.

Deputy Enda Kenny

We are now in a national crisis. Tomorrow the live register figures are expected to show an increase of between 10,000 and 15,000. I do not want to be back here every month looking at spiralling live register figures that represent men and women being made redundant at a time when employment is so critical for us.

In the cut and thrust of debate in the House things that are said can be dismissed for no good reason. Let us consider this national crisis in a positive and constructive fashion, putting our minds together. We have said on numerous occasions that in the short term the Government should reduce the two VAT rates from 21.5% to 21% and from 13% to 10%. We have put forward propositions to slash red tape — a cause of serious concern to small businesses throughout the country — by 25%. We also put forward views on how to reform the regulatory authority to put the consumer, rather than business, first, and suggested that rates be frozen to give businesses a chance to breathe.

The CSO will publish the figures for the live register tomorrow and they may show an increase of between 10,000 and 15,000. I point out constructively that the Fine Gael Party — specifically, Deputies Coveney, Varadkar and Bruton — has produced a serious document on the basis of which we believe 100,000 jobs could be created over four or five years in the areas of clean water, energy, broadband and so on. This would of itself improve the attractiveness of this country as a location for industry while at the same time providing jobs for men and women all over Ireland. In a spirit of dealing with the national jobs crisis, I ask the Taoiseach to arrange for his Ministers to meet with the three senior spokespersons from the Fine Gael Party and officials from the Departments involved to investigate these proposals and their costings in a spirit of constructiveness and decide whether the Government considers there is merit and capacity for job creation in this document.

We can stand up here every week and talk about various proposals from an Opposition party, but this is a serious one. It is about young men and women finding jobs which will of themselves create an attraction for further investment in the country. Rather than the usual promise to examine the issue, I ask the Taoiseach to arrange for the three Ministers involved to meet a formal delegation from the Fine Gael Party, together with the officials, to discuss the merits of our proposals to create 100,000 jobs. That is what the people on the street want. They want to have hope, confidence and a belief that somebody here can point a way towards job creation. We have a serious proposition and I ask the Taoiseach to treat it in a constructive and serious fashion.

The Taoiseach

As I said, Ministers are considering the implementation of policies that have been referred to in Fine Gael's documents in a range of areas. I will not make any adverse remark about the putting forward of proposals by Fine Gael and I do not believe in engaging in petty partisan politics in any aspect of this. The best thing for me to do is to give my considered response on behalf of the Government to the document — considering various issues, as we must — and I will do so in good faith——

Deputy Enda Kenny

I thank the Taoiseach.

The Taoiseach

——on the basis that Fine Gael's proposal is a serious attempt to show people that every effort will be made by the House to address the issues before us in as constructive a way as possible. Now that the elections are over, the next three years may provide us with that opportunity.

Deputy Tom Sheahan

The next year and a half, maybe.

Deputy Finian McGrath

Deputy Sheahan should take it easy.

Deputy Eamon Gilmore

Today is the last day in existence of the Combat Poverty Agency. Whatever reason the Government had to abolish this agency, it is not because it has put an end to poverty. Last Wednesday I raised with the Taoiseach the problems faced by poor people in my constituency — people who have recently been hit by poverty — in accessing the emergency social welfare service operated by the community welfare officers. Today there is still no community welfare officer in Dún Laoghaire. We are told the officer will not be back until 13 July and no cover has been provided. Neither is there any cover for the community welfare officer in Loughlinstown, who will not be back until 14 July.

This service operates for people who have no money. Does anybody in the Government understand what it is like to have no money? One cannot use a credit card because one does not have one; one cannot go to the ATM because one does not have a bank account, or there is nothing in it. The only place one can go if one has no money is to a community welfare officer. In my constituency, which I share with the Minister for Social and Family Affairs, who is sitting beside the Taoiseach, people who have no money are now being told there will be nobody to provide them with money until 13 or 14 July. I raised this last week and nothing was done about it.

Meanwhile, the message that people who have little or no money have been getting over the weekend is the orchestrated leaking of the report of an bord snip nua. We are told it is intended to reduce the social welfare bill by €1.5 billion, which represents a cut of slightly over 7% on basic social welfare payments. This means that a person receiving €204 per week, which is less than €11,000 per year, would have his or her weekly payment cut by about €14. These are the stories we have been hearing over the weekend.

Can somebody ensure that the community welfare service operates efficiently throughout the country and that there is somebody there to meet and hear the needs of people who have no money? Will the Taoiseach give an assurance to pensioners and people on basic social welfare payments that their payments will not be cut?

The Taoiseach

The matter raised last week by Deputy Gilmore is being followed up. The community welfare officer is an important front line service which provides significant support to disadvantaged people. Notwithstanding the pressure it is under, it is critical that the service be maintained. As a result of a significant level of staff absence due to sick leave, as the Deputy pointed out last week, the Dún Laoghaire and Loughlinstown clinics were closed by the superintendent community welfare officer at short notice. The HSE has expressed its regret that the matter was not solved speedily without interruption of service. Emergency measures are now in place to resolve the difficulty. The clinics in question will be open tomorrow from 11 a.m. until 1 p.m. to deal with immediate priority cases and will have full-time staff in place from Thursday. The ongoing industrial relations issues have been referred to the Labour Relations Commission and a date is awaited. I wished to clarify this for the House as the matter has been resolved in the past number of hours after representations by the Minister.

With regard to the question arising from Deputy Gilmore's statement, the commitment of this Government to social welfare provision is demonstrated by a record over which we are proud to stand, including the quadrupling of child benefit over the past ten years — from €44 to €166 per week — and doubling of jobseeker's allowance and old age pension. We made those important improvements in times when resources were available to the State, and rightly so. The Deputy referred to the fact that the Combat Poverty Agency is being moved within the remit of the Department of Social and Family Affairs. It is not going out of business. In regard to the national anti-poverty strategy, the implementation of many of the targets that arose under that strategy over the years has fed into the social partnership process and into much of the budgetary policy and decisions that have arisen in successive budgets over a long period of time. I contend that this commitment has been very significant.

The Minister for Finance will deliver a budget in early December. At this point in time, coming into the month of July, it is important to point out that public service pay and pensions together with social welfare make up some two thirds of total day-to-day expenditure. We are facing into a difficult situation this year whereby we are borrowing in the region of €70 million per day to meet the difference between revenue take and the cost of providing public services, including in all those important areas to which the Deputy referred. The Government is very cognisant of the need to ensure, in devising its budgetary strategy for 2010 and thereafter, that we protect to the greatest extent possible those on social welfare and those who require the assistance of the State. That will be fundamental to our approach.

It is also important to point out that the increase in social welfare rates, depending on the various payments, was between 3% and 3.8% in the 2009 budget. This was against a predicted inflation rate of 2.5%, but what we are seeing this year is a deflation rate of the order of 4%, with the consumer price index declining by that percentage in the course of this year. While nobody suggests that welfare payments, by their very nature, are sufficient in all circumstances, I stand over the record of this Government and successive Ministers for Social and Family Affairs who ensured in the good times that we had record social welfare budget packages. Included in this number are the current Minister, Deputy Mary Hanafin, and her predecessors, the Minister, Deputy Martin Cullen, the late Séamus Brennan and others. At this point in the process, as we face into a difficult budgetary situation, we must consider all options while being mindful of the need to protect the most vulnerable to the greatest extent we can possibly can.

Deputy Eamon Gilmore

I am glad to hear that the local problem is being resolved, but it should not have required me to raise it here twice before that happened. This type of emergency service should not break down anywhere and I hope we do not see a repetition of the problem elsewhere.

My second question was to ask the Taoiseach whether he would give an assurance to pensioners and others that there will not be a cut in basic social welfare payments. I can only interpret his reply as a coded confirmation that there will be cuts. Does the Taoiseach consider it reasonable that persons on €204 per week, or less than €11,000 per year, should have their level of payment reduced? I again invite him to assure people categorically that basic social welfare payments will not be cut.

Does the Taoiseach intend to publish the report of an bord snip nua? If so, will he inform the House when that will be done and whether it will be published in full?

The Taoiseach

In regard to the specific issue Deputy Gilmore raised last week and which has been resolved on the basis of the most up-to-date information, there is genuine regret on behalf of the Health Service Executive that this issue arose in the first place. It is a problem that need not and should not be repeated. I hope that is the case. As I said, there are ongoing industrial relations issues which have been referred to the Labour Relations Commission.

Deputy Eamon Gilmore

This is not an industrial relations issue.

The Taoiseach

There are no industrial relations issues in regard to the specific question raised by the Deputy, and he expressed the hope that they would not arise elsewhere. My point is that there is a need for a long-standing industrial relations issue to be resolved so that we can move on.

Deputy Eamon Gilmore

That is a different matter.

Deputy Emmet Stagg

It is a red herring.

The Taoiseach

I am entitled to make that general point as well as answering the specific question.

Deputy Róisín Shortall

It is a separate issue.

The Taoiseach

As I said, the estimated total spend on social welfare this year is €21.3 billion. Given that the anticipated total tax take will be between €32 billion and €35 billion, based on Exchequer returns thus far, the Deputy will accept that this level of commitment by the Government to social welfare provision is unparalleled and unprecedented in the history of the State. I accept that the Deputy, as an Opposition Member, would like categorical assurances on a range of issues. As a member of the Government, it would be unfair of me to decide, in a situation where the Minister for Finance is only beginning an Estimates and budgetary process, that expenditure of that order should not be considered in any way.

Regarding the Deputy's interpretation of my replies, I remind him that there was no cut in social welfare rates last year. The reason we avoided such cuts was in order to ensure that we protected people to the greatest extent possible.

Deputy Róisín Shortall

What about the 2% cut?

The Taoiseach

In regard to that particular matter, an option that was available was to cut rates. I am responding to the Deputy's leader. One of the options for the Government to consider was the cutting of rates, but it was not taken up on the last occasion. Not only were there no cuts in rates but, as I have indicated, there was an increase of between 3% and 3.8% in rates against the background of a disinflationary rate of 4% this year. During the times when resources were available to the Government in far greater measure than is the case now, the social welfare provision did not simply meet the inflationary effect, as was the policy of a Government in which the Labour Party was centrally involved, but far exceeded inflationary targets, and rightly so, in line with national anti-poverty strategy commitments and targets, many if not all of which were met by this Administration when it had the capacity to do so.