I wish to share my time with Deputy Shortall.
Financial Resolutions, 1998. - Financial Resolution No. 9: General (Resumed).
Debate resumed on the following motion:
THAT it is expedient to amend the law relating to inland revenue (including value-added tax and excise) and to make further provision in connection with finance.
——(Minister for Education and Science).
If the budget debate is resumed next week, the Deputy will have eight minutes remaining. Is that agreed? Agreed.
I am pleased to have the opportunity to speak on the budget debate. While I welcome some aspects of the budget, as spokesperson for social, community and family affairs I am disappointed as many people have been let down. For example, the Carers' Association anticipated major improvements for its members. Is the Minister aware that just 50 extra carers will benefit from the changes announced in the budget? The sum total allocated is about £1.5 million when they expected about £10 million. The Carers' Association asks if the Government is out of touch with its work. The association which is ten years old today has claimed this is the worst budget ever for them. It was led to believe at pre-budget meetings that there would be significant increases in the number of carers receiving the allowance, following the budget. I would not consider an extra 50 as a significant number. Recipients over 66 years of age will get an increase of £5 per week while those under 66 years of age will get an increase of £3 per week. Will the Minister advise on the number of people over 66 who will benefit from the increase of £5 per week?
I welcome the decision to allocate the free travel pass to carers. To qualify for a carer's allowance one has to care for another person on a full-time basis. Are carers being given a free travel pass they cannot use? Does this mean the Department of Social, Community and Family Affairs is relaxing the full-time care and attention rule?
The Minister stated he has changed the rules regarding UK disability pensions which will be disregarded in the carer's allowance means test. Is the Minister aware that 0.5 per cent of the total number of recipients will benefit? Why did the Minister not do the decent thing and ease the means test to the benefit of a significant number of carers?
I hope the Minister for Health and Children will deal with the issue of rates of pay for home helps in a fairer manner. It will be a disgrace if they do not receive a significant increase in a time of plenty. The gap between the haves and the have nots has widened following the budget. Those who do tremendous work have been forgotten.
Another group who will not benefit is disabled people. The funding allocated will go nowhere near reducing the more than 3,000 on the waiting lists for residential and day care places. The Minister said people with a disability and carers are receiving the recognition they deserve but the people concerned and the groups which represent them would not agree with this sentiment.
Family income supplement is vital to families on low incomes. While I welcome the Minister's decision to base the assessment on net rather than gross income, I cannot understand why families will have to wait until October 1998 to benefit from the changes announced in the budget. I understood the reason for a December budget was that changes announced could be introduced by the beginning of the new tax year. The families concerned cannot afford to wait and I ask the Minister to reconsider.
The increase in child benefit amounts to £18 per year or less than 35p per week per child. Is that the response of the Minister for Social, Community and Family Affairs to the cost of rearing children? An increase of 35p per week is unacceptable. The Government states it is developing family support services. Child benefit is often the only source of income of the woman in the home. Prior to the general election Fianna Fáil promised to introduce a payment for women in the home. Is this what it had in mind? Nearly one-third of children will spend Christmas in poverty.
I welcome the increase of £5 per week for pensioners. Not all pensioners, however, will receive this amount. The spouse of a pensioner considered to be a dependant will receive an increase of £1.50 per week, giving a total increase of £6.50 or £3.25 each.
The living alone allowance and the over 80 allowance have not been increased. They should be increased in line with inflation.
Non-contributory pensioners have been let down. The Department of Social, Community and Family Affairs takes interest on savings into account in the assessment of means. If old age pensioners were earning the amounts the Department believes they are earning in interest they would have no need to apply for old age pension.
The proposals announced in the budget will not lead to a reduction in the number of long-term unemployed. The £3,000 tax free allowance for the long-term unemployed will be in conflict with existing schemes such as the back-to-work allowance and Jobstart. The Minister said the new schemes will not be available concurrently with other employment incentive schemes. This means that the long-term unemployed, in taking up employment, will be faced by competing rather than complementary State supports. The new scheme is unworkable in the form announced. The Minister should look at it again.
The extra £5 granted to old age pensioners represents an increase of between 6.4 per cent and 7.4 per cent. The extra £3 granted to everybody else represents an increase of between 4.2 per cent and 4.6 per cent. A couple on long-term unemployment assistance with two children will receive an increase of 3.1 per cent. Why have they been granted a lower increase?
Will the Minister consider extending the free schemes to include women in receipt of widow's pension? I am aware of many young widows who have to rear their families on a widows pension. It would not cost much money to include them. It could mean the difference between having or not having a telephone. The extra electricity units and fuel vouchers would make things a little easier in times of need. The free schemes should be available to all old age pensioners. The restrictions are unacceptable in a time of plenty.
Young people can no longer afford to buy their own houses. In my home town of Killarney they find it virtually impossible to buy houses. When I bought my house a mortgage of £30,000 was sufficient but nowadays that would not cover the deposit. The average mortgage in Killarney is approximately £90,000. The Minister for the Environment and Local Government should seriously look at this issue. Young people are being driven towards local authority housing lists. Five or six years ago they would not have contemplated this. As their incomes are too high they do not qualify for local authority housing and they cannot take out a mortgage as they cannot afford the repayments. What are they to do?
There are many old houses young people could buy cheaply and refurbish if there was a refurbishment grant. Alternatively, the new house grant available to first time buyers should be increased. We will fail in our duty if we do not help young couples for whom the first four of five years of marriage are the most difficult. The position in the constituency of the Minister of State, Deputy Byrne, may not be as serious but in Killarney and south Kerry which depends on tourism, house prices are as high as those in Dublin. I have raised points affecting only the genuinely needy in our society.
I thank Deputy Moynihan-Cronin for sharing her time.
The annual budget affords the Government an opportunity to take critical decisions in relation to how we, as a society, function economically and socially. In recent years much emphasis has been placed on getting our economy right, in terms of creating the right conditions for growth, the generation of wealth and increasing employment opportunities. We have been very successful in that regard, to the point at which our economy is now the envy of Europe.
Having got our economy right, we need now to concentrate on getting our society right. It is true that, in spite of a booming economy, for many there has been no resultant "feel good" factor, the reasons for which are twofold. First, many people have not been touched directly by the upswing in our economy and remain trapped in poverty. In relative terms, this poverty has been compounded because of the increased affluence in other sectors. Second, the rapid rate of economic growth over recent years — which has led to unbridled materialism in society — has left many people feeling decidedly uneasy with the way our country is going. Most people are very uncomfortable with a society which encourages sectional interest and greed and have a basic sense of justice and fairness. They do not want a society divided between the "haves" and "have nots". As we observed from a recent opinion poll, most people recognise that this budget benefits the better off; there is no doubt about that.
This year, because of the healthy state of our national finances, the Government had an ideal opportunity to seriously tackle those divisions within our society. It had the requisite funds to take the kinds of imaginative initiatives which would genuinely have afforded equality of opportunity to all citizens but, sadly, that opportunity was squandered. Instead the Government availed of that opportunity to deepen the divisions within our society, to foment greed and materialism and further marginalise the poor and excluded.
While the Government may talk the language of "inclusiveness", its actions, by means of this budget, render those words fairly meaningless. In addition to ignoring the poor and low-income earners, it has reneged on its commitment to social inclusion under Partnership 2000 and, in failing to honour those commitments, has seriously jeopardised the social partnership built up and maintained so carefully and critically over recent years.
Most Members are in no doubt that our social welfare system is seriously outdated and full of anomalies. For that reason it is no longer acceptable to continue to tinker with that system annually while we are well aware of the anomalies and many poverty traps within it. Unfortunately, no attempt was made to move toward a basic income system in this budget, to which the Government paid lip service, indicating that it would produce a paper on the subject at some point in the future. However, in terms of the here and now it has done nothing to improve or streamline our social welfare system.
The reason we need to move toward a basic income system is that a number of categories of people are seriously disadvantaged by the manner in which our social welfare system is operated. The whole principle of dependency underpinning our social welfare system, is totally and utterly unacceptable to women. Because that dependency principle applies — and of course, the rates for dependants are so much lower than basic rates — women receive no recognition in their own right. That is just not acceptable. In the last general election I met many elderly women, pensioners, who felt very aggrieved. It was their belief that, having reared the Celtic tiger, they were entitled to recognition in their own right and to have their contribution to our very successful economy acknowledged. For that reason, at the very least, provision should be made for individual payments, another very good argument for having a basic income system.
In spite of the Government's pre-election promises — which, I suppose, in many ways, duped women in the home — it has not honoured them . Again, a basic income system would cater for women, rearing children, who have chosen to remain in the home. Regardless of whether their husbands or spouses are working, or dependent on social welfare, the woman in the home is entitled to recognition of her contribution and, therefore, entitled to a basic income.
The extraordinary regulation still prevails, that the means of young unemployed people are assessed on the basis of their parents' income and, because there is no facility for providing them with a basic income, whenever their parents' income exceeds the eligibility limit, they are deemed to be ineligible for any assistance. In this way, we encourage them to leave the family home, indicating that all they have to do is leave it, when they will then receive full employment assistance with a rent allowance. That allowance was introduced to meet emergency circumstances but it has now grown out of all proportion to the point at which it is costing the State vast sums of money. Obviously, in those circumstances, the pro-family thing to do is provide those young people with unemployment assistance or, my preference, with a basic income while living at home so that they can continue to do so while seeking employment.
Equally, the advantages of a basic income for young people under 18 years of age would enable many of them to remain within the educational system. I have many constituents whose children cannot remain at school beyond the age of 12 or 13 simply because they cannot afford to allow them do so. Nothing has been done in this budget to help teenagers of poorer families to remain in school, whose parents simply do not have adequate funds to purchase uniforms, school books or the many other demands made on them at second-level.
Indeed those young people who struggle to remain in school, against all the odds, having obtained their leaving certificate and continue to study for their post-leaving certificate receive no assistance in spite of pre-election and other vague promises that something would be done in that respect. Nothing is being done to provide some support for those participating in PLC courses. A basic income system would address many such problems also.
It is essential that we agree the very purpose or raison d'e tre of our taxation system. It must be viewed as an instrument for the redistribution of wealth, for generating the kinds of funds which will enable us provide good quality services for all our citizens. What is the point in having more income in our pockets if, whenever a child becomes ill, we encounter long hospital waiting lists, insufficient numbers of doctors available in casualty departments, or our elderly parents cannot gain access to residential care? That is not what society is about. Therefore, we must examine what it is we are endeavouring to achieve through our taxation system.
Unfortunately there has been no major tax reforming action taken in this budget. Here I might revert to election promises, to attempts made at that time by the Government parties to encourage greed among young people, to sell the simple message of reduction in the top rate of income tax, in an effort to persuade people to vote for them on the basis that they would be better off themselves.
We must remember that life is a lot more than just about having more money in one's pocket; it is about providing a decent society that can accommodate all of its people's needs. Clearly the approach taken by this Government favours the better-off whereas our taxation system should be seen as a means of creating a cohesive, fairer society. Unfortunately, the Government has taken a regressive approach to our whole tax system. Nobody likes to pay tax but in order for our tax system to gain acceptance among the general public, it must be seen to apply fairly to everyone and all sectors. Everyone must be seen to pay his fair share of tax, but that will not be the case as a result of this budget. Regrettably, the reduction in corporation tax moves the burden of tax towards the PAYE sector. That is grossly unfair.
Debate adjourned.