I hope we do not have issues like this every morning. After those few words, we need a jolly discussion to cool the atmosphere. I am not surprised that some Members are annoyed at the statements that have been made but, at the same time, people are entitled to their opinion.
The Minister has recognised the need to help the less well-off but I do not think he has gone far enough. In the course of his speech, the Minister recognised that his Department are only concerned with paying out benefits and I do not think he has done enough to encourage those on social welfare to seek work. The Minister takes credit for having saved the State a lot of money in the last two years and that represents good work by him. Indeed, if all Ministers were as attentive our financial position would be much healthier. It is sad to think that we have to pay out so much on social welfare.
It is not good enough to concentrate on the elimination of abuses. The Minister has suggested that employers should pay more to the social welfare system but he has not given any incentives to them to take on more employees. For example, the Minister has not said that employers who take on more workers will not be asked to pay the maximum amount in contributions to the State. Under the social employment schemes introduced by the former Minister, Deputy Hussey, in 1986 not as many people qualify for full unemployment benefit. That was not the intention at the time. It was not the intention that we should say to a person if he or she works for three days, that they will be paid £70 and be entitled to work elsewhere.
It appears that agreement has been reached between the social partners and the Government that those on long-term unemployment who are employed on a social employment scheme should do any work available for £70 per week. That has occurred at local authority level following agreement between the Government and the unions. Many employees in State bodies have been let go and replaced by part-time workers. In other words, we have let people go who earned £130 per week and taken on people to do the same work at £70 per week. I do not think we should use the social welfare system to do that.
I am surprised that the Minister, who spends millions each day, has not encouraged employers to take on more workers. He has not said he would like to reach the stage when his spending would be reduced from £6 million per day. I should like to give examples of what I find wrong with the system because I do not think it is right to criticise it if I cannot produce the evidence. In the last three or four weeks in Cork, I have heard of many people being employed on a part-time basis. It appears that the popular thing to do today is to hire people on a part-time basis. That suits the State because people are taken off the live register. The Department accept that a person over 60 is entitled to have his dole posted to him and that he can work up to 18 hours per week. However, the same does not apply to young people. I am aware of a young man who trained as a fitter with Cork County Council but at 22 years of age can only obtain part-time work, earning £50 for four hours work on four mornings each week. The employer is happy, and the State is happy because he is not on the live register. On the other hand, we are telling people over 60 that they can collect their benefit and work 18 hours per week. That is not fair. If the Minister wishes, I can give him details of the company and the individual.
The State tells employers that if they wish to employ people they must pay more PRSI. I do not think that is an incentive to business people to take on employees. When are we going to say that there should be one tax? PRSI is a tax. We should make a health comtribution, but that is not what PRSI is in reality. The tax should be set at a single percentage rather than 22 per cent from the employer and the rest from the employee. I am very much aware of the amount of money the State gets in from contributions from employers and employees. The whole system should be simplified.
A person working part-time and getting £50 a week still has to pay a certain amount of PRSI. A person in Great Britain who earns under £43 a week pays only 2 per cent. Here there is a disincentive in that both the employee and employer must pay. Here one pays PRSI up to an income limit of £16,700 and after that one pays no more because one does not get any service. I see no reason why a person earning over £16,700 should not continue paying because he is earning most. We should be taking less from the person who earns less, in other words, the person earning under £120 a week. I make no apology for suggesting that people should pay PRSI even after they have reached the income limit of £16,500 because although they get no benefit after that they are usually covered by the VHI and, because of our health situation, more and more people are joining the VHI. In 1992 people will join other insurance companies to get private health cover because the cover available on the national health at the moment is not too good.
There are no incentives to employers to employ more people. The Minister has not said he wants fewer people on social welfare. There are over 240,000 people out of work and over 30,000 a year leaving the country. They are the official figures. I wonder how many are really leaving? In my city there are certainly 200 a week leaving. In every family young people are leaving and this is very sad. Last year the Minister saved £90 million, yet the numbers unemployed or emigrating are the same. How does the Minister reconcile those figures? How did he save that money? Was the situation created deliberately, in that if people were left without social welfare for long enough there would be a saving? I have to say that in the long-term there is no saving.
I am confused about the whole thing and now I am getting very annoyed about it. Since 1980 the number of people out of work has doubled and it does not seem to matter which Government are in power. There is no incentive. Employers do not want people working for them. They just do not want to take on extra workers. The welfare system is such that there is no incentive to work. There are 109,000 people on long-term unemployment assistance.
The Minister makes a distinction between the unemployed and the long-term unemployed. They should be treated similarily. They are all people on social welfare. We recognise that there are 32,000 people leaving the country each year. Imagine what we are not prepared to recognise, but agencies like the Combat Poverty Agency will recognise it for us and give us our answers. It seems we are not prepared to face up to the facts. There were 6,000 extra jobs created last year, yet there are more people on the unemployment list. We are saying rationalisation is needed and advocating that a person giving up his job should get a lot of money.
Not more than three weeks ago a company I know of with 15 people working decided they could carry on with fewer workers by bringing in English subcontractors. The 15 workers got on average £52,000 per person. This money was tax free, but if the tax and other deductions had been made, that figure would be nearer £75,000 or £80,000 per person. The following week that company had only five people working earning £300 each a week. Three of the people who got £52,000 got another job, and the State allowed that. Is that a fair system? One of the people who got £57,000 got a pension of £130 a week and, in addition, got a job with another company. This person is only 51 years of age. I am not saying he should not work, but we are creating a situation whereby the people left in that company are working ten hours a day rather than eight hours and probably doing three runs instead of two.
There is a need for a serious review of the workplace on the part of management and workers. We are creating this situation and yet we have only to walk 100 yards to meet a person who is working 22 hours a week for £50 a week while another person gets £57,000, £130 a week pension and another job. The £130 a week should be enough for him if it were tax free — and it should be tax free if it is a pension. I will admit that between the £57,000, the pension and the earnings from the other job that person is taxed very highly. I have no objection to that. This person is paying a lot of money and coming home with 50 per cent of his money because of the present tax system. The State makes by taxing him more.
We have created a situation where we are making 15 people richer while another five people, who could have been given a job, remain unemployed. That is what is happening with our welfare and our tax systems. We then say we want people to come into the country to create jobs. Employers take on people on a part-time basis and give them £40 or £50 a week for working 20 or 21 hours, with the result that these people cannot get any other benefit. If the person worked only 18 hours a week he would get benefit. Under the social employment scheme a person could work for three days a week and his employer would have no objection to him working elsewhere for the rest of the week. He would not even want to know how much the person earned for those days. The employer's attitude is that he pays the person £70 a week and he is saving the State money. I resent that. It is the Minister's duty to simplify matters and to have a situation whereby everybody will be treated on an equal basis. Priority should be given to the people who need work.
I put a very strong emphasis on the fact that everybody should have some kind of work but there is nothing in the Bill to provide for that. I would like to see employers employing more people but the Minister has given no incentives in this regard. People are making a lot of money in chemical plants and in areas of high technology and they then leave the country when they have their money made. I am not saying we do not want these people in the country; we do want them and I would like to see more of them coming here. The Minister should provide an incentive to employers, particularly in the private sector, to take on more people without having to pay PRSI for these people. The employer has to pay 17 or 18 per cent and he also has to pay a certain amount for the employee. We should create incentives in our local areas for employment such as glass factories, timber plants and so on. The Minister should have discussions with the Minister for Labour, Deputy Ahern, and with social partners with a view to creating incentives for employers by reducing the amount of PRSI they have to pay. Many companies are not making as much money as the high technology plants which are situated throughout the country.
People may criticise the Minister and say that he is giving money to one area and not to another. He has recognised that there are many people who are entitled to benefits, such as deserted husbands. At long last they are entitled to the same benefit as deserted wives. There are now more deserted wives and unmarried mothers and I make no apologies for saying that these people should be looked after. It may not be an ideal situation but it is fact of life.
The Minister has also recognised that people who are looking after their relations in the home should receive benefit and I welcome that. These people never received benefit up to now and it is not before time that it was introduced. I congratulate the Minister for that. The Minister is prepared to recognise the need for benefits in this area but he should extend them to other areas also. I know the Department of Finance will say they do not want to spend more money and that if they extend the benefits it will be an extra charge on the State. The Minister should put strong emphasis on employers creating more work. I will be pressing this matter on Committee Stage and I will be asking the Minister why he is not prepared to reduce PRSI for employers.
When the social employment scheme was first introduced the intention was to get people off the unemployment list and allow them to work not alone in the public sector but also in the private sector. As I said here before, employers should be allowed employ people on a part-time basis. If a job card was introduced for workers it would mean that the Department would not have to employ as many people to investigate irregularities. Every person in the State, irrespective of where they are working, should have a job card. The Irish do not welcome the idea of having identification. Every employee should have a PRSI number and his signature should be on his job card which would be held by the employer at all times. When the employee leaves the employment the job card would be sent to the local exchange where it would be put through the computerised system. That would save a lot of money.
It has been recognised at long last that we have a high rate of poverty. The Minister for Social Welfare saved £90 million last year. In this year's budget he provided an extra £70 million for social welfare. It has been recognised that over one-third of the population are living in poverty. Rather than saving £90 million the Minister should have given, say, 10 per cent of it to the people below the poverty line but that did not happen. They did not even get 5 per cent. In comparison with other Minister, the Minister for Social Welfare has done excellent work at Cabinet level. Cutbacks have been made in the Department of the Environment and other areas and I congratulate this Minister for not cutting back in the social welfare area. He has shown the other Ministers he can save money, at least in the short term.
There are people living in poverty, people on social welfare, who are suffering as a result of loan sharks. I know the Minister has put a lot of work into this area and is very much aware of the problem. I would like him, in his reply, to tell me what assistance he is getting in this regard from credit unions and banks. What are they doing as regards getting more and more people away from these loan sharks? The Minister is taking particular interest in this area. It is sad that many people on lower incomes are suffering as a result of these loan sharks.
There is concern also about pension allocations. I have heard of a number of cases of people claiming non-contributory allowances who are being assessed on their gross bank savings. For instance, a couple with up to £6,000 savings in the bank seeking a non-contributory pension would be given a contributory allowance but the assessment is being made on the gross amount of their savings. In other words, if they are receiving interest of between 7 per cent and 10 per cent on their savings in the bank they are assessed on the gross amount. Even though it was agreed three years ago to abolish DIRT — on the basis that it would not yield very much — it is now being admitted that the yield from it is greater than had been anticipated. Yet, the person being assessed for a non-contributory pension has not been given the benefit of being assessed on his or her net savings. The Minister should examine that aspect because it is most unfair to such people. Many people with such savings reserve them for their funeral or burial expenses. I am aware that others have greater savings. I know of many pensioners who have savings they contend are sufficient only for their burial whereas, in fact, they would be sufficient to bury half a village. That is the other side of the coin which has been acknowledged from the DIRT yield and which has been advanced as an argument in favour of its retention.
Why is it that the oldest people receive more than those in greater need? I have been advancing that argument to the Minister for the past three years. I am glad that the Minister is recognising that anomaly at long last. I contend there is no difference between a person of 79 years of age and another of 80. Yet the 80 year old receives more than his or her counterpart aged 79. Again, a 79 year old receives much more than, say, a 65 year old or 55 year old. Until such time as that anomaly is abolished I will continue to press the point. I do not see any reason that a son of, say, 55, with three children, should receive much less money than his parents of 75, 77 or 81 even though the parents may not need it. I do not see the logic in that. I shall be pressing that point on Committee Stage.
I am glad that the Minister recognises that there are people who are defrauding the social welfare system. While the Department are tackling the problem of abuse of the system it has to be said that there are also people being investigated who should not be. I resent that practice. Indeed, any savings effected through the elimination of abuse should be given to those most in need because it is an undeniable fact that there are some people more in need than others who are not benefiting. Until such time as that is rectified I will continue to press the point.