Could the Minister tell us why he was not able to bring the qualifying age down to 65? Why did he let a second opportunity go by?
Social Welfare Bill, 1979: Committee and Final Stages.
Section 1 agreed to.
SECTION 2.
Question proposed: "That section 2 stand part of the Bill."
It is purely a question of cost, and I gave other things priority. It is our objective to bring it down to 65.
Could the Minister put a time limit on achieving this objective?
I am afraid I cannot.
The Minister indicated that the rates of increase, 12 per cent and 16 per cent, should be more than adequate for the year to cover inflation and allow a real increase. I would like to ask two questions on that. What is the estimate in his Department of the inflation rate at the end of the year? Will he comment on the point I made that the inflation rate is related to a CPI figure, the weightings which relate to the average citizen? In this case we are not dealing with an average citizen but with a group who spend a very large proportion of their income on food, light and heat—items which have attracted increases of 17.9 per cent, which is significantly higher than the maximum percentage proposed by the Minister.
The Senator knows as much about inflation rates as I do. In the context of the budget and the general projections raised in the budget, the target is to have inflation down to 5 per cent by the end of the year. That, of course, is subject to a very large number of imponderable elements. I cannot go any further than that. The increase in the price of food is greater than the increase of the CPI. Up to now, traditionally it is the CPI figure that has been taken, and I suppose that could work for and against social welfare recipients. If you take food as the basis for your calculations, it might work against the recipients. Up to now the basis upon which the calculations were made have been on the wider basis of the CPI. I accept that recent figures show that food has escalated in cost to a greater extent than the general index.
There are two points I wish to make on that. In so far as social recipients and small or lower income families are concerned, there is also the children's allowances to be taken into account. Increases in children's allowances are intended to compensate for the reduction in the food subsidies. There is another small but not unimportant factor, and that is the increase which we have given in January, February and March in the EEC butter scheme.
If for good strong external reasons the imponderable elements to which the Minister refers drive the CPI considerably beyond what is anticipated, would the Minister consider relieving social welfare recipients by supplementary allowance?
I can only repeat what I said in my general remarks, and that is, that if there are any changes emerging out of the series of widespread consultations which are taking place at present with different groups, it will be my responsibility to put forward the case for the social welfare recipients. The cost of bringing the age down to 65 years would be £7 million, a very substantial sum.
It was done on the trot for four years during the recession.
I have just to take my priorities as I find them. If I had £7 million that year, that is not how I would spend it.
Question put and agreed to.
Section 3 agreed to.
SECTION 4.
Question proposed: "That section 4 stand part of the Bill."
This section scars the Bill because it does financial harm, and probably consequential social harm, to a particularly vulnerable section of the community. The Minister has not convinced me that his case for doing this is a good one. The total amount that he is saving the Exchequer is something in excess of £100,000 and when we compare that with the total national budget, it cannot even be described as paltry. It is not even coming into the paltry class it is so small and insignificant in terms of the national budget, but in terms of the impact on the pockets of the people concerned, it could be immensely significant and could bring a real hardship to many people. To suggest that because the levels are being raised by 12 per cent the matter is not as onerous as might otherwise be, is misleading because the 2,000 people who are being cut off altogether are not getting the 12 per cent increase, 6,000 people are having their incomes substantially reduced, and others are also suffering from the reduction. When those reductions are set against the 12 per cent, the net position will probably be worse.
The Minister is not entirely fair when he compares the multiplier here with the multiplier used for the tax system, because the tax system was designed to get at farmers living on viable farms, fertile farms, and the multiplier is meant to represent the income per acre. Nobody would argue that the income per acre from land in the west could be compared with income per acre of land in the midlands or the south. I would be interested to hear from the Minister if he has any figures on income per acre from lands in the disadvantaged counties. Even within those counties there are variations. The income per acre in parts of south Longford could be considerably more than the income per acre in west Mayo. It is not a good argument to say that his increase of the multiplier is not a hard one because it is so far below the increase proposed by the Minister for Finance. The multiplier should be related to the area where it is being applied. I would be glad to know if the Minister has any hard information on which to base this increase or to justify it.
The Minister admitted in his statement that it would be better if we did not have to make the change. In that statement he admits that it is detrimental change. I have not heard from him yet why he had to make it. It is surely not to save something in excess of £100,000. It cannot be that reason because that sum is so insignificant. I ask the Minister why is he making the change?
Because this change was made to save a tiny sum of £160,000 this will increase the fear among that section of the community that this is the first step in a movement to take this assistance away from the lot of them. If it were done to save a considerable sum in a difficult time it might be understood, but it is to save an amount of money that would appear to be insignificant. That will encourage the belief that they are all due to be dealt with in succeeding stages as the years go on.
I have nothing much to add to what I have already said. I did not advance the argument that this multiplier is significantly smaller than the one used for income tax purposes around the rest of the country as a compelling argument. I said it was one of the factors we should take into account. Even taking these multipliers as they are now—£30, £50, £60—they are still relatively favourable and I do not think anybody could deny it.
The £20 multiplier, for instance, has not been increased since 1966 and farm incomes in the west have increased very considerably since that date. I do not think anyone could deny that. I do not think anybody could argue that in the case of the £10 valuation or under, the increase from £20 to £30 is not in line, and a great deal less than the increase in farm incomes that have taken place in the case of the smallest farms.
There is also the disadvantaged area scheme which is being widely availed of to the benefit of these small farmers. Approximately 20,000 people are benefiting from this scheme and 13,000 of them will actually gain in 1979. I want to suggest to the Seanad that the attempt to create some feeling of outrage about this is not justified by the fact.
The Minister has not answered my question as to whether he has any logical basis for the increases that he has decided on in the multiplier. Had he decided on any other options? Did he just pick one of them out of the air?
I said that the simple logical basis is that in so far as it is meant to be a calculator of the notional value of a particular agricultural holding for unemployment assistance purposes, there is every case for increasing it to the extent that has been done, and particularly at that sum, when we are ensuring, by the application of the full 12 per cent across the board, that in no case could it give rise to anything which could be even remotely described as hardship.
The Minister is increasing it, as he admits, on the blind. That is the reality of the situation. I agreed with him when I spoke on Second Stage that these people's incomes have increased, but relative to the rest of the community their position is still the same, they are still disadvantaged and underprivileged. Until we know precisely the measurement of their increase, it is risky at best, unjust at worst, to tamper with the level of assistance that we give to the rest of the community.
Is it not correct that the farmer concerned can ask for an assessment of his income on the ordinary basis, without the notional and therefore——
Yes.
——looking at this, this is an advantage a farmer has over the ordinary person who has to get a straight assessment. If a farmer thinks his notional assessment is better he can go for the notional, and if he thinks the ordinary assessment is better he can go for the ordinary. I think that is an advantage the farmer has compared to the ordinary person.
Question put.
The Committee divided. Tá, 17; Níl, 12.
Tá
- Brennan, Séamus.
- Brugha, Ruairí.
- Cassidy, Eileen.
- Conroy, Richard.
- Cranitch, Mícheál.
- de Brún, Séamus.
- Dowling, Joseph.
- Ellis, John.
- Harney, Mary.
- Herbert, Anthony.
- Honan, Tras.
- Hyland, Liam.
- Jago, R. Valentine.
- Lanigan, Michael.
- McGlinchey, Bernard.
- Mulcahy, Noel William.
- Ryan, William.
Níl
- Burke, Liam.
- Cooney, Patrick, Mark.
- FitzGerald, Alexis.
- Governey, Desmond.
- Harte, John.
- Hussey, Gemma.
- Kilbride, Thomas.
- McAuliffe, Timothy.
- Markey, Bernard.
- Molony, David.
- O'Brien, Andy.
- Reynolds, Patrick Joseph.
Tellers: Tá, Senators W. Ryan and Brennan; Níl, Senators L. Burke and Harte.
Question declared carried.
Sections 5 to 18, inclusive, agreed to.
SECTION 19.
Question proposed: "That section 19 stand part of the Bill."
When speaking, I gave some instances of what I am advised the real increase in these children's allowances will be to families where there is an income tax liability. For the first child the real increase will be 13p a week, for the second child it will be 17½p per week, and for the third and subsequent children it will be one quarter of a penny per week. I would like to know from the Minister if those figures are accurate?
The figures of increase in children's allowances are quite clear in this Bill. I do not think we are concerned with the income tax code in this legislation. The increases in children's allowances are, as a number of Senators said, quite adequate and substantial, 52 per cent and 40 per cent and over 20 per cent. While they are not as generous as we would all like them to be they represent a fairly significant increase in children's allowances and will help to offset the increase in the reduction of food subsidies for social welfare recipients and lower income families. One could do all sorts of abstruse calculations if one is that way inclined and prove that it means only so much an hour or so much a day or so much for whatever other period one chooses but the fact is that the allowances are there and will be payable in cash to the families concerned.
The point I am making is that a farthing per week is what the real effect of the increase is for income tax payers, that is, 1p per month, whereas what the Minister gives in his Bill is £5.50. The sum of £5.50 seems substantial and reasonable but when the activities of the Minister for Finance are taken into account, because he reduced the tax allowance for children in the income tax code, that £5.50 is eroded in the case of a taxpayer to a single penny. The point I am making to the Minister is that this is a cosmetic increase and should not be presented as a real increase. The Minister should not allow the Minister for Finance to undo the good of this social welfare increase.
Question put and agreed to.
Sections 20 to 28, inclusive, agreed to.
Title agreed to.
Bill reported without amendment, received for final consideration and passed.