Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Tuesday, 11 Dec 2001

Vol. 546 No. 3

Social Welfare (No. 2) Bill, 2001: Second Stage.

I move: "That the Bill be now read a Second Time."

On a point of order, the Bill is to conclude by 10 p.m. I understood an hour had been put aside tomorrow for this.

I do not have that information.

This Bill is the first of two which I intend to bring before the House to implement the £850 million social welfare package announced in last week's budget. This is the second year running in which the social welfare package amounts to £850 million, and the first time in many years in which it has exceeded the income tax package.

In the five years since this Government came into office, Ireland has changed dramatically for the better. This Fianna Fáil-led Government has delivered on its commitment to ensure social welfare recipients have benefited from economic growth. Over the lifetime of this Government pensioners on contributory old age pensions received increases of almost 50% compared to a miserly 10% under the rainbow Government. Pensioners on non-contributory pensions got increases of no less than 56% compared to 11% under the rainbow coalition Government. Child benefit has increased by more than £60 per month per child for the first two children compared to only £10 under the rainbow coalition Government.

Fianna Fáil in Government has massively increased spending on social welfare from £4.5 billion in 1997 to more than £7.4 billion in 2002, an increase of almost two thirds in just five years and over 20% on 2001.

The recent budget has been welcomed by a wide range of groups. The Combat Poverty Agency commended the policy direction of increasing welfare payments in line with earnings. People with Disabilities in Ireland, the representative body of people with a disability, welcomed the improvements for people with disability. In the past few days none other than the leader of Fine Gael, Deputy Noonan, said that one of the good things about the budget was the significant resources in social payments. However, Deputy Noonan believes the individual detail of the budget is not the issue. That is where we in Fianna Fáil differ from Fine Gael. We know that the detail of how individuals benefit is what really counts.

The Government ignores the individual.

The Opposition parties have an appalling record when it comes to looking after the less well off. Even now Fine Gael is criticising this Government for overspending.

The Minister is lying.

Deputy Hayes criticised our support for widows while in the Fine Gael pre-budget submission he called for an increase for widows of £10.90, less than the £12 we provided for older widows and widowers.

On a point of order—

The Deputy cannot have a point of order because he is being disorderly. He should withdraw his allegation and resume his seat.

I will withdraw the term "lying". He is misleading the House. It is the Chair's responsibility to make sure he puts factual information before the House.

I am factually correct.

The Deputy should not lecture the Chair. The Chair knows what it has to do and the Deputy should comply with Standing Orders.

A look at the record will prove that what I said is correct. Deputy Hayes claimed that the lowest social welfare rate of £93.56 was not just or acceptable. Why then did the Fine Gael pre-budget submission propose a rate of £94 per week, only 44p higher? This is the second time this week that Deputy Hayes has been within 50p of the right answer.

The Minister is deliberately misleading the House.

The Deputy must withdraw that remark.

The Minister is continually misleading the House.

The Deputy must resume his seat while the Chair is on its feet. Will the Deputy withdraw his remark?

Is the Chair referring to the remark that the Minister is misleading the House? He is deliberately misleading the House.

That is a disorderly remark. It must be withdrawn.

It is a matter of fact, but if I do not withdraw it I will be thrown out so I will withdraw it.

The Deputy must withdraw the remark unconditionally, without reservation and without comment. He knows what the consequences will be if he does not do that fairly quickly.

I will withdraw it for the sake of it.

I will say nothing. In line with the commitments in An Action Programme for the Millennium and in the Programme for Prosperity and Fairness, all old age pensions have been increased by more than the rate of earnings growth over the period. When we came into office, the contributory old age pension stood at only 28% of average industrial earnings. We have increased that in each year to 31% in 2002, well on the way towards the target set by the national pensions policy initiative of 34%.

This Bill addresses commitments set out in the Government Action Programme aimed at building an inclusive society, improves the living standards of everyone on social welfare and fulfils our commitments under the Programme for Prosperity and Fairness. With increases ranging from 9% to 11.8%, people dependent on social welfare will see real and significant increases in their incomes next year.

I will now outline the key provisions of the Bill. Over our period in Government we have given pensioners weekly increases of £5, £6, £7, and £10 in both 2001 and 2002 compared to increases of between £1.50 and £3 given by the rainbow coalition Government. The increases provided for in sections 2 and 3 of the Bill more than deliver on our commitments.

Last year I gave a commitment to increase widow's and widower's contributory pension for those over 66 to the full old age contributory pension rate. The special increase provided for in section 2 of the Bill of £12.04 will bring the new rate to £114.04, within £2 of the full old age contributory rate.

The Government is also committed to substantial increases in other social welfare payments. Over the period from 1997, general social welfare increases have increased well ahead of inflation and ahead of increases in gross average industrial earnings.

In this budget, despite the difficult times caused by the world economic downturn and the resulting pressure on resources, we are giving very significant increases to those who are least well off. The increases being provided this year for people on the lowest payments are greater than last year and are being paid much earlier. We are providing a general increase of £8 per week in respect of social welfare customers under pension or retirement age. In percentage terms, the £8 increase is between 7.4% and 9.4%, depending on the payment concerned. In addition we are providing a special increase of £9.56 for those on the lowest rates of social welfare supplementary welfare allowance and short-term unemployment assistance. This brings the lowest social welfare rate up to £93.60. This increase of £9.56 is in line with the majority recommendation of the Social Welfare Benchmarking and Indexation Group, which was established under the PPF and reported last September.

There is considerable merit in raising all payments, as and when this is possible, with the objective of ensuring a reasonable relationship in due course between the average living standards in the community and the level of social welfare payments. Not only have we made substantial progress towards the PPF target of £100 for the lowest social welfare payments, we have almost reached this target this year. I have no doubt that the target will be exceeded in the remaining budget in the period of the programme. This Bill is fully in keeping with our commitments under the PPF.

We are also providing further very significant increases of £10 per week for qualified adults aged 66 and over with lesser amounts for those on reduced payments. A pensioner couple on a full social welfare payment will therefore get an increase of £20 per week. The qualified adult allowance for a person over 66 has been increased from 72% of the old age contributory pension in 1997 to 77% in 2002 and now represents 85% of the old age non-contributory pension. As I promised last year, this will be increased in the coming years to the full old age non-contributory pension rate to benefit women in the home who do not qualify for the contributory pension.

There are also substantial increases for qualified adults under age 66. The qualified adult allowances are being increased by £8 and £9 per week so that, for example, a couple on the lowest rate of payment, supplementary welfare allowance, will get a total increase of £17.50, bringing their weekly payment up to £155.60 and, if they have children, they will also benefit from the substantial increases in child benefit.

It has been a source of some complaint in the past that social welfare increases used to come into effect later than budget tax changes. We were berated that increases were announced in December and not delivered until much later – the second week in June when we came to office.

What about child benefit?

We made dramatic changes in that regard; the Deputy should not start me talking about that. It was also a source of complaint that tax changes were implemented much earlier than social welfare increases. Last year I brought forward the implementation date of social welfare weekly rate increases to the start of the tax year, that is, 6 April. Now that the tax year has moved to the start of January, I am bringing forward the budget increases in weekly rates of payment to 1 January, at a cost to the Exchequer and a benefit to social welfare recipients of approximately £80 million. This means that in 2002 social welfare clients will be paid their increase for the full 52 weeks of the year compared to 29 weeks when we came into office in 1997.

In the case of an old age contributory pensioner, this is equivalent to an extra 4.4% annual increase in their earnings, apart from the actual increase. People receiving short-term payments such as unemployment payments will receive their increases immediately in the first week in January. In the case of people on long-term payments, such as pensions, because of the time needed to print and distribute pension books, pensioners will receive their increases somewhat later.

Some 210,000 people, mainly widows and widowers, one parent families, invalidity pensioners and persons receiving carer's allowance, will receive a lump sum payment for six weeks of the budget increases on 14 February. This will be included in their new order books effective from that date. For example, a widow on a contributory pension over 66 years of age will receive a backdated payment of £72.24, nearly 92. A further 393,000 recipients, mainly old age and retirement pensioners and disability allowance recipients, who are due to get their new order books in April, will receive a special payment in mid-February comprising six weeks arrears of the budget increase and seven weeks advance payment. For example, a pensioner couple over age 66 will receive a lump sum payment of £260 or 330 on 15 February.

Section 4 of the Bill increases the weekly income thresholds for family income supplement from January next by amounts ranging from 34.22 to 35.09 or £26.95 to £27.64 for all families on FIS. This will lead to a net gain of £16 per week in the average FIS family payment. These increased payments will be paid immediately in the first week in January next. Section 5 provides for an increase in the earnings ceiling for employees' social insurance PRSI contribution and the income ceiling for payment of optional contributions while section 6 provides for a reduction in the employers' higher rate of social insurance contribution by 1.25%. The earnings ceiling is being increased in line with projected increases in average earnings in 2002 – that is, 8% – by £2,260 from £28,250 to 38,740 with effect from the start of the income tax year in January next. The employers' higher rate of social insurance contribution is being reduced from 11.3% to 10.05% with effect from the beginning of March next at a cost of 237 million or £186.65 million in 2002 and 347 million or £273 million in a full year.

Section 7 provides for a once off transfer of 635 million or £500.10 million in the 2002 financial year from the social insurance fund to the central fund of the Exchequer.

Give us a history lesson on that. The Minister will not give us that history lesson.

This measure has provoked some debate within the House over the past week. The social insurance fund was established 48 years ago, in 1953. For all but the last five of these years, contribution income to the fund was insufficient to meet demands on the fund. During the first 43 years of the fund's existence, the shortfall in income has been met from Exchequer funds, in other words, by the taxpayer.

Since 1997, income to the social insurance fund has exceeded spending. This remarkable turn around is a result of this Government's prudent management of the economy—

What about Fianna Fáil's election manifesto?

—with the result that the social insurance fund now enjoys an accumulated surplus of over £1 billion or 1.4 billion. In these circumstances, it is entirely appropriate that a part of this surplus should be returned to the source from which earlier shortfalls were met. The value in real terms of transfers in the opposite direction since 1953 exceeds £11 billion or 14 billion.

Fianna Fáil said they would not touch it. That is another broken promise.

This year's social welfare budget package is equal to last year's record amount, £850 million. In a year when the public finances are so tight, it would not have been possible to achieve this level of social spending without recourse to borrowing if the transfer from the fund had not taken place.

The Government did not need to borrow.

Notwithstanding this transfer, the social insurance fund will remain in a healthy financial position. Even after the changes in this year's budget are taken into account, the projected accumulated surplus in the fund at the end of 2002 will be over £960 million or 1.2 billion. It would make no sense to have this kind of money "in the bank" and to go out borrowing to pay for social welfare improvements.

There were lots of ways to do it.

The Government slashed corporation tax.

The social insurance fund is the people's money. We are giving it back to them.

The Government has set a bad precedent.

Deputy Penrose of the Labour Party wanted to raid the pension reserve fund. The Opposition parties have no credibility in their criticism of this section. On Sunday, 2 December, the Labour Party proposed to take £815 million from the pension reserve fund for its pet projects. In fact, it threatened to raid the entire £5.5 billion which has been set aside for future pensions. Now it criticises the transfer of a much smaller amount.

Fine Gael has raised spurious arguments about our future plans for the social insurance fund. It has shown political immaturity by failing to interpret properly the Government's commitment to the prudent management of the fund. We have ensured that benefits are guaranteed into the future by establishing the national pensions reserve fund, despite objections from the Opposition benches. The Deputies tend to forget these things. Fine Gael is obviously disappointed that the Government did not return the country to borrowing. Fine Gael's inability to manage the economy is heavily underlined by its continued objection to the common sense principle of putting the social insurance fund surplus to productive use instead of borrowing. Does the Opposition want to go back to the days of a £1 increase in child benefit or a £1.50 increase for pensioners? If not, I challenge it to say publicly, without the palaver and blather, how it would have funded this year's social welfare budget package.

Not by raiding the social insurance fund. The Government has set a bad precedent.

The Deputy would raise taxes and raise the pensioners' fund. We do not know what Fine Gael will do but privately its members say their promises would have to be resourced by the social insurance fund. They will not say it publicly, however. I have no doubt that the House will agree that this Government's prudent and successful management of the economy over the past four years has provided the foundation upon which the healthy state of the social insurance fund rests. Equally, it is appropriate that the taxpayer, who has contributed so much to the fund since its inception, should benefit in the circumstances I have outlined.

At present, there is £5.5 billion in the pension reserve fund for future pensions.

That is the Eircom money.

It is the result of taking money from Eircom shareholders.

Next year, as a result of a further 1% being contributed to the fund, it will amount to another £800 million pension reserve fund.

The Eircom smash and grab. That is where the money came from.

Having taken a sum of £500 million out of the social insurance fund, there will still be £1 billion in the social insurance fund. Actuarial projections for the fund show that it will be in considerable accumulated surplus for the next ten years. Indeed, in the next four years it will reach approximately £4 billion in surplus.

Not if the Minister for Finance, Deputy McCreevy, is in office.

This Bill, the first of two instalments, is a clear demonstration of this Government's commitment to looking after the needs of the elderly, widowed persons, carers and the unemployed and others who are dependent on our social welfare system. It will ensure that the resources of this £850 million package will be directed to those most in need.

I conclude by issuing a challenge to the Deputies on the other side of the House and if they do not address the challenge, I will return to it when the debate concludes. Deputy Broughan, Deputy Brian Hayes, Deputy McGrath and other Deputies criticise us for overspending on the one hand and, on the other, say we are not giving enough.

Not us, Minister.

Would the Deputies opposite please tell the public in plain and simple language how they would have funded the social welfare package that this Government has brought in?

No problem.

Deputy Broughan's party, in its financial statement two months ago, said there would be tax stabilisation, whatever that means. On Sunday, 2 December last, that party unashamedly said that it would, in effect, raid the money put aside for old age pensions. I must thank the leader of Fine Gael for complimenting the Government on such substantial increases in social spending.

There are good things in it. I accept that.

For once, Deputy Noonan acknowledges the work of this Government with regard to social welfare spending.

I acknowledged consistent poverty issues.

It goes back to Fine Gael's policy document claims that it would give less money to people than it received.

In any event—

The Minister is going for the line.

I would like to hear the proposals of the Fine Gael Party as how to it would fund a social welfare package equivalent to the one we have delivered here, if that party ever gets the chance to do so. I commend this Bill to the House.

Bring back Deputy Mattie Brennan.

The Minister should keep paying for the advertisements.

It will be very interesting if the Opposition gets off the hook. I understand that it will vote against the provisions of this Bill. We will sing from the rooftops that, as far as this side of the House is concerned, the Opposition is voting against the £10 increase for old age pensioners, against record increases way ahead of inflation, against child benefit increases—

There is a motion down.

There was some £25 delivered this year and last year.

The Minister did not deliver. He is going out of office.

When the Deputies opposite were in office, they only delivered £1.

That is not accurate.

I will give an example. Just over four years ago, the Government with which the Members opposite were involved-—

We were not involved.

They were involved. That Government gave social welfare increases of £7 on child benefit to a family with three children.

This is ancient history. Deputy Brian Hayes was still in school at that time.

Last year, this Government gave £80. This year, we are giving £80 again. Not only that, we are bringing the increases back from September to 1 April, quite apart from the weekly increases which we are bringing back to 1 January. Shame on Deputies if they are to vote against this Bill. We will remind the public.

At the taxpayers' expense of some £200,000.

The Opposition should not think the public are fools. Opposition Deputies will publish glossy documents claiming the benefit from all these changes as if they had delivered them.

It is public information.

The Opposition had nothing to do with it. It will go out and proclaim to the multitude about the great increases in social welfare despite having voted against those measures in the House. I rest my case.

I know that it is Christmas time and the Minister is a frequent visitor to the pantomime but his performance tonight has all of the hallmarks of a Minister and a Government in deep crisis. That might have something to do with yesterday's Sligo-Leitrim poll result. I know that Deputy Mattie Brennan is a well respected colleague. Perhaps it is time to bring him back.

When Apollo 13 was in trouble in space, they were in contact with Cape Canaveral over the antenna. From Apollo 13 they said, "Houston, we have a problem." We certainly have a problem in relation to some of the sections in this Bill the Minister presents to the House this evening. Despite his incomprehensible remarks, this Government is raiding the social insurance fund. It is taking £500 million out of the fund when there was an explicit commitment in the 1997 Fianna Fáil party manifesto that that fund would be secured, and that a board would be established to ensure greater accountability and transparency. Various employers, unions, and third pillar representatives were to be part of that board to ensure accountability. In an astonishing statement, the manifesto also said – the Minister himself might have said it – that the Government would create a new board to supervise the financing and operation of the social insurance fund.

I should have said at the outset that I would like to share my time with Deputy McGrath.

The Deputy is obviously unprepared in all areas.

The manifesto then went on to say that that fund was the workers' guarantee that their benefits would be there for them when needed, without interference or means testing. It goes on to say that board members will include representatives of employers, employees, self-employed people, retired people and other interest groups. I was astonished to read in the manifesto the claim that there would be an actuarial assessment of the fund. Its future needs were to be placed before Dáil Éireann at least every three years. "Houston, we have a problem".

Another broken promise.

Fianna Fáil said this five years ago.

Is the Deputy saying that to his constituents?

Five years ago, they said that there was absolutely no difficulty. The social insurance fund was safe in their hands. They said this fund would be administered by a new board. Yet, four and a half years later, they are prepared to raid money that is not theirs. This is not the Minister's money. It belongs to Irish workers. It belongs to employers PRSI. Many constituents of mine have asked what benefits they get from PRSI. I try to show them that there are tangible benefits in difficult times. I refer to the comments made recently by Mr. Begg of ICTU when he said the trade union pillar wants to have enhanced payments for redundancies. Deputy Broughan and I are on record, as is the Minister at certain times, as supporting the principle of paid parental leave. We want to ensure that Irish workers, who have paid considerable sums of money into this fund, get the benefits they deserve.

What do we see here but a slick job from Fianna Fáil? It thought we would not be able to read the history books. It welched on its commitments once again. What a colossal U-turn this is. Last Friday, the Minister admitted that we may be in difficulty on the unemployment front. The difficulties that have to be confronted could well ensure that the social insurance fund is needed in difficult times over the next year. It is an act of financial irresponsibility.

I have read the contributions of the distinguished former Member, Dr. Ryan, who introduced the 1952 Bill. Dr. Ryan clearly set out the reasons this fund was to be established. It is not like any other fund. It is not an ordinary current account fund. It is a current liabilities account because moneys that go into it are there for designated purposes. They are not there to get the Government through a difficult patch. They are workers' moneys and for specific purposes. The Minister has a neck to come to the House and attack the Labour Party for its proposal to take certain moneys out of the pension reserve fund.

Where is the consistency from this Government? I will have much more to say about this. I understand the Minister will dodge a debate with me on "Morning Ireland" tomorrow because he does not want to confront the U-turn in his policy.


Correction, I agreed to do it. I said that I would be delighted to appear on the programme.

We will come back to it.

The Deputy has misled the House.

I will not let the Minister waste my speaking time.

The Deputy has misled the House.

Allow the Deputy to speak.

Thank you, a Leas-Cheann Comhairle, I appreciate your—

The Deputy has misled the House. He is incorrect.

You will have an opportunity at the end of Second Stage.

I ask the Deputy to verify with RTE—

Minister, I ask you to resume your seat.

The Minister needs to take a few tablets because he is under pressure now from this side of the House. This is what we will continue to do.


A Leas-Cheann Comhairle, please constrain that man. I do not know what he is on at the moment.

The situation proposed by the Government in this raid has not arisen before. We, on this side of the House, will have much more to say about it on Committee and Report Stages over the next number of days.

When the Government came into office, it was given a unique opportunity to make a major difference to the lives of the people. The social and economic objectives of all previous Administrations were severely limited by financial constraints, but not those of this Government. It came to power during a very special period in the history of the State, a period we may never experience again. The Government was not constrained by financial resources. The only constraints on it were of its own making. These included a lack of political imagination and a lack of political skills in managing the big issues impacting on people's lives, such as issues relating to health poverty, income poverty, housing poverty and the lack of public services for some of the poorest people.

The biggest failure of all has been to understand the reality of poverty and the failure in terms of political will to tackle the deep social divisions and the profound inequalities that exist in our country. To deepen social divisions and to widen inequalities at a time of unprecedented prosperity is a national scandal. I have no doubt the Minister for Finance, Deputy McCreevy, is the pin-up boy of the rich and well connected in this country. In every budget, he has consistently favoured the rich against the poor. In each of the past five budgets, he has widened the gap between the richest and the poorest sections of our country.

The gap between the rich and the poor in our society is now so wide that they effectively live in parallel universes. His ideological approach to social and economic policy met with no restraint from his colleagues in Government. A closet Progressive Democrat, he totally abandoned traditional Fianna Fáil principles of social solidarity and used his period in office as a class warrior for the rich and well connected. His success in promoting the interests of a particular class was facilitated by the failure of the Minister, Deputy Ahern, to defend the interests of the weak and the poorest. At a time of plenty, during a period of unprecedented prosperity, the Government has allowed the gap between the richest and the poorest to grow deeper and wider.

Who writes this stuff?

The divide between rich and poor is now deeper in Ireland than in any other country in the EU. That was admitted by the Minister during Question Time this afternoon when he gave us the latest information from the household survey. Is that not right, Deputy Broughan?

Through its taxation and social welfare policies, the Government has consciously and deliberately deepened inequalities in society. Let me illustrate the nature of the growing divide with some basic facts and figures after five budgets. Single people who are long-term unemployed are £20 per week better off. Those on £15,000 per annum are £96 per week better off while those on £40,000 per annum are £206 per week better off.

I know who is writing this stuff.

After five budgets, couples who are long-term unemployed are £48 per week better off, couples with one income earning £15,000 per annum are £97 per week better off and those on £40,000 per annum are £206 per week better off. These income distributions reflect the choices made by the Government during its five years in office. No amount of rhetoric or political assertion can change these facts. It is obvious that the Government's commitment to building a fairer and more inclusive society, as outlined in the Programme for Prosperity and Fairness, was just window dressing designed to impress, as CORI has so rightly pointed out.

We have it now.

One major illustration of the Government's failure to give social inclusion the priority it demands can be seen in its treatment of the review of the National Anti-Poverty Strategy.

Who wrote this? Was it Seán?

Promised in the Programme for Prosperity and Fairness, this review has been ongoing for over a year. Seven working groups completed their studies several months ago, but the Government has still failed to publish the National Anti-Poverty Strategy review. Facts and figures may be used to bamboozle or deceive.

As the Government staggers towards the exit door, what is the reality for tens of thousands of people living in poverty? A recent study by the Dublin Institute of Technology social science department of 50 welfare dependent mothers in a Dublin suburb found the following. Mothers in low income families are going without food to ensure their families have decent meals. The study found women make do with toast or bread and do without meat so that other family members do not go without. Watering down milk and skimping on medically prescribed diets were other ways of making limited income stretch further. That is the life lived by some people in the land of the Celtic tiger economy.

A recent report from UCD highlights the reality of poverty among the elderly. According to that report, as many as 2,000 elderly people die prematurely each winter from cold related illnesses because of fuel poverty. Homelessness is also part of the reality of that life. The Simon Community estimates that there are up to 5,000 homeless persons in the State, many of whom are suffering from mental illness and for whom there are no services. More than 200 of the 800 people who used Simon's Dublin shelter last year had serious mental illness problems. They are on the streets because they have nowhere else to go. That there are hundreds of mentally ill people homeless in this country is an extraordinary indictment of this Government and its policies. They are among the most vulnerable of all and yet they are allowed to wander the streets uncared for and unwanted.

When it came into office, the Government could have made different choices. It could have delivered a first rate health service but instead it has presided over growing waiting lists. It has deepened inequalities by favouring access to health care for private patients over public patients. It could have established common waiting lists for public hospital patients. Access to quality health care is critical in any coherent anti-poverty strategy.

There are now 125,000 people on public housing waiting lists, but the Government is failing to meet its own very modest housing targets. In the national development plan, it promised 5,500 social housing units in each of the four years of the plan. In 2000, the first year of the plan, it delivered just 3,000, a shortfall of 2,500.

The Minister quoted selectively from my pre-budget submission, but I stand over everything I said in it. Despite all the politicking, there are good measures in this Bill. I proposed a total of 48 different measures and some of them were accepted. I proposed a £10 increase across the board. I am disappointed that the Minister has continued – I would have taken my hat off to him if he had done something – to make distinctions between various groups of people who obtain welfare assistance. It is wrong that we continue to have a view that there are deserving poor and undeserving poor.

The Minister spoke about widows. Widows under 66 years of age will not get the increase about which he spoke. The day the Minister announced the increase for widows over 66 years, I congratulated him. If the Minister amends the Bill to extend the free schemes to all widows and widowers, I will change my objections to the Bill. I put that challenge to the Minister. That was part of my proposal but he did not mention it in his tirade this evening or last week. It is not just about income – this is where I disagree with some of the commentators from the various groups from which we hear. Poverty relates not only to income; it relates to household poverty, fuel poverty and health poverty. We have to be honest enough to state that. If the Minister had gone some of the way towards a proposal I made and which he did not quote about moving towards £100, which is in the Programme for Prosperity and Fairness, I would have congratulated him.

I referred to that.

Deputy Hayes, if you addressed your remarks through the Chair, you might not provoke the Minister.

If the Minister had gone some way to change the CDAs, I would have complimented him on it. I do not think the issue is about rates – I have to be honest – but about a variety of schemes we can introduce through our social welfare system to lift the poorest group of people out of poverty. I still do not believe that by making distinctions in social welfare schemes we are going in the right direction. I would have been much happier, for instance, if the Minister had decided to make a blanket increase across the board.

I welcome the fact the Minister has moved in relation to those on unemployment assistance, but it is not enough. I understand a lot has to do with constraints, but I do not think those choices have been made wisely.

Over two months ago, Deputy Broughan and I asked a direct question concerning the benchmarking and indexation group, namely, whether the Minister is in favour of it. Does he want to reach the minimum benchmark level by 2007? I ask him to give us an answer. We know Deputy McCreevy and the Tánaiste have not signed up to it.

The Deputy was not listening to me on the budget.

I heard the Minister's speech, but he has never said in public whether he agrees with the majority recommendation in that report. If he answers, I will take my hat off to him. Will the Minister say "Yes" or "No"?

I have already said in my budget speech—

The Minister has not committed himself to it.

This is not Question Time, Deputy Hayes.

Maybe it should be. The point I am making is that the Minister claimed in his statement in the House last week that he is linking it to income. When Deputy Broughan and I asked him a direct question, we received no answer. I have identified the fundamental question which he is not answering.

The Deputy should read the record.

That was the point I made.

Can Deputy Brian Hayes explain how he would fund the £850 million?

The Minister cannot answer the questions I ask.

I said in my document that we should have made more progress with regard to the £100. I recognise that the Minister has taken on board the recommendation of the Combat Poverty Agency in relation to unemployment assistance with the addition of £1.50, but more should have been done. We have an unhealthy definition in our social welfare code saying that if one is unemployed one is somehow a loser and, consequently, will not receive the kind of resource we need in our system, with which I have a problem. We need to ensure that when we provide increases, they apply across the board. I accept that this is difficult and it is something we can debate further on Committee Stage tomorrow. However, it is something that could have been achieved and I hope we will move towards it.

With regard to the increases from January, many of the deadline dates that the Minister and his colleague, the Minister for Finance, are setting between now and May have nothing to do with backdating payments and everything to do with the next general election. It is cynical. It was more than possible to put an administrative system in place to deliver these small payments on 1 January. I will not put my name to a Bill which is effectively giving very small increases backdated to mid-February. It is not good enough. No other citizen—

The Deputy has not answered my question on how he would fund—

—would put up with that.

We have so much more to say but, unfortunately, very little time because of the constraining nature of the debate. I will hand over to my colleague Deputy McGrath.

Deputy Brian Hayes had a full 20 minutes but he did not take it. He has not answered the question.

I thank Deputy Brian Hayes for sharing time with me. With regard to the Social Welfare Bill, we welcome many of the provisions and increases contained therein. Nonetheless, it is the responsibility of the Opposition to point out the deficiencies and pitfalls in what is proposed.

The first thing we must point out is the raiding of the social insurance fund. Many ordinary people on the street recognise that they were contributing to a social insurance fund and that it is now being raided by the Minister for short-term gains. I am interested in the term he used in his speech. He said that £500 million is being taken for "productive use". What does he mean by "productive use"? I do not think one can call current spending "productive use". He really means "productive use" in the sense that the Government will use the fund to buy victory in the election. That is the "productive use" of which the Minister speaks and it is a shame.

Deputy Brian Hayes has already put on the record of the House the commitment given in the Fianna Fáil manifesto in 1997 relating to the social insurance fund, and it deserves a response from the Minister because—

Will the Deputy give way?

No. You are a senior member—

Remarks should be addressed through the Chair. Time is limited.

I am sorry. The Minister is a senior member of the Fianna Fáil party. That commitment was given in the party's election manifesto. If election promises are to mean anything, there must be—

What about the other commitment?

Allow Deputy McGrath to speak.

—a serious attempt to honour them. This will come back to haunt the Minister. When we had our Committee Stage discussion on the pension fund last year, we spoke of pensions. I had a particular view on pensions and planning for the future and the Minster had a totally different view. He was adamant that it was important to put this money aside to make provision for those pensions. Now the Minister is raiding that fund, which is totally contrary to what he said previously.

Where does this yellow document come from that Deputy McGrath has in his hand?

We have scribes.

It is important to point out some of the comments that were made in relation to this budget. I want to quote from the CORI justice commission report. The commission has issued its commentary on budget 2002. The report has a big heading across the front: "Five in a Row: Prosperity without Fairness". It states:

For the fifth year in a row this Government has failed to give priority to the deprivation being experienced by Ireland's poorest people. While the country has been experiencing the most prosperous period ever, the Government's budgetary choices have produced a situation where Ireland's poorest people are expected to live on £93.56 a week. Its choices have also widened the rich-poor gap by £191 a week. This is unjust, unfair and unacceptable.

That is what CORI said about the recent budget and about the performance of this Government. The report continues:

However, the most important requirement in tackling poverty is the provision of sufficient income to people to enable them to live life with dignity. This Government has failed dismally during its term in office to address this issue despite having the best opportunity to do so since the foundation of the State.

What about the "We welcome" bit?

That is a commentary on the front-page of the budget analysis by CORI. It is fairly damning of this Government and what it has attempted to do.

I want to comment on the advertising campaign that has been launched by the Department of Social, Community and Family Affairs in the newspapers and on radio and television. I have never seen the like of it in my time in this House. I am here almost the same length of time as the Minister for Social, Community and Family Affairs. We have seen, day after day, publications with full-page advertisements concerning the Minister, two photographs in each advertisement, all at the taxpayers' expense and all promoting him and this Government. If he wanted to disseminate information, there are other ways in which he should have gone about it. He went about it in a shameful way. It is interesting to note that he spent £130,000 in the national papers. If one is serious about disseminating information into people's homes, then advertising should be done through the local newspapers. Various reviews and surveys have indicated there is a far higher readership of local papers than of national papers.

Hear, hear.

The Deputy wants me to spend more.

It strikes me that this was something produced by the Minister's spin doctors, who would not know what a local newspaper is. They are interested only in the national papers. A sum of £130,000 was spent.

I have no spin doctors.

The Minister proceeded to spend £108,000 advertising on five television stations. I am not sure what the five were.

CNN. UTV was the last, to cover Dundalk and Drogheda. There were eight radio stations and 16 independent radio stations. It was a personalised campaign and I am disappointed taxpayers' money was spent like that but I am not surprised.

If one deals with the content of some of the increases, the Minister has heard me say for the past four years that it is ludicrous that in this day and age we pay child dependent allowances at three different rates.

Deputy McGrath's Government froze it.

The child of someone who is unemployed is worth £13.20 per week. The child of someone on an invalidity payment is worth £15.20 per week. The child of a widow is worth £17 per week. Can it be in the interests of common justice to classify children according to the category one puts their parents in? Is that fair or just? For the past four years we have asked the Minister to do something about that and each year he has failed miserably. Why does the Minister not do something even at this stage, even if it is only to take away something we can talk about? The Minister has failed to do something, yet he is prepared to say he is interested in individuals and individual measures.

I welcome the increase in family income supplement. It is a great way to get money to the less well off and those struggling to survive. However, is it not time to introduce natural justice here? One can have two families living next to each other, with three children and identical mortgages and outgoings, but if one breadwinner is self-employed and the other a PAYE worker, we can give FIS to the PAYE family while the person next door, who may be on exactly the same income according to the Revenue Commissioners, will not be paid FIS. Is that fair? Why will the Government not move to bring about justice for those people?

Let the record show the Deputy did not reply to the question.

I move amendment No. 1:

To delete all words after "That" and substitute the following:

"Dáil Éireann, deploring:

(1) the decision of the Government to raid more than 635 million from the Social Insurance Fund, and

(2) the failure to make adequate progress towards the benchmarking of social welfare payments,

declines to give a second reading to the Bill."

The Social Welfare (No. 2) Bill, 2001, marks an historic development in the history of the State, dealing as it does with budget 2002 increases in euros from late December and early next January. The increases in social insurance and social assistance are welcome, as is the proposed increase in child benefit which will be included in the Social Welfare Bill, 2002. Yet this Bill must be strongly opposed by the Labour Party on three key grounds. For many recipients of social assistance and social insurance benefits the Bill is a bitter disappointment, since it fails to implement the report of the social welfare benchmarking body and lift social welfare incomes sufficiently to enable the targets of the benchmarking report to be reached from 2003 onwards. Second, the Bill is a total rejection of the long-standing and just demands of the carers of Ireland for an end to the grossly unfair means testing of the carer's allowance. The appalling proposal in section 7 to raid the social insurance fund to enable the Minister for Finance to balance his shaky, ill-conceived budget is an affront to workers and employers. If passed, it will create a woeful pre cedent for future Governments to interfere with this and other dedicated national assets whenever a tight budgetary situation presents itself.

The Minister for Finance was anxious in his Budget Statement to be judged on the five budgets he has introduced, though like many commentators in the House I do not believe there will be any further chapters in his book. To continue his metaphor, these five chapters have been a tragic story of missed opportunities in the most prosperous times in the history of the nation. For hundreds of thousands of our fellow citizens the McCreevy book has been a horror story, as they struggle on abysmally low social welfare incomes. The Minister for Social, Community and Family Affairs has been a willing acolyte of the harsh ideologue from north Kildare in all this suffering—

Who wrote that? Finlay, the bearded wonder?

—who is now one of our longest serving Ministers for Finance.

This came home strongly to many Members when we were presented with the fine report of the Vincentian Partnership for Social Justice named "One Long Struggle". This study of low income families surveyed 163 households in Dublin and found that current social welfare rates and the minimum wage are grossly inadequate and do not reflect the current cost of even the most frugal standard of living.

Regarding social welfare rates, the study concluded that there is an urgent need to increase them to a realistic level at which people can live with some dignity and without the burden of a continuous shortfall. The report showed a majority of respondents suffering considerable anxiety and depression as they tried to juggle their family responsibilities while coping with financial shortfalls from week to week. I recently quoted in the Dáil the deficient daily diet of low income families as disclosed by the Vincentian Partnership research.

This study urges the Department of Social, Community and Family Affairs to apply a budget standards approach to the levels of social welfare payments required, which the Minister has never done, and it indicates that a typical lone parent with two children receives – admittedly before the budget – almost £40 less than what a low cost but acceptable budget would require.

The recommended levels of income in "One Long Struggle", by the way, are £135 to £155 for a single adult or 171 to 197, and £200 or 254 for a lone parent with one or two children. Yet the basic personal assistant rate in Schedule B of the Bill is still only 118.8 and a parent with two children can still only look forward to 157 from early January. In a very significant work of recent research the social welfare rates of the Government were found to be and continue to be hopelessly inadequate.

The Government enjoyed unprecedented rates of double digit growth for almost its entire life yet for its first three years increases in social welfare income barely kept pace with inflation.

Given the massive growth in the wealth of the country, these increases were truly miserly. The Minister will remember—

Wrong, absolutely wrong.

—the £4 increase he gave in the 2000 budget which was eaten away by the unnecessary and rampant inflation of 7%.

The Minister and the Minister for Finance refused all calls from me and other colleagues to even consider an additional social welfare increment to compensate our poorest citizens. In a characteristic reflex of the Government, the alleged pleadings of the Minister for Social, Community and Family Affairs at the Cabinet table were curtly rebuffed by the Minister for Finance before last Christmas.

Wrong. The Deputy is wrong.

The welcome £8 basic rise last year only partly compensated social welfare recipients for the ravages of inflation in 2000. Again in 2001 the £8.06 which has been offered will be expected to cover the dramatic surge in the price of food and services which has been apparent since at least mid-summer. It is clear that worries about euro rip-offs from 1 January next—

Twice the expected rate of inflation.

—are misplaced as the rip-offs have already begun under the old currency. Deputies are constantly informed of relentless rises in the price of foodstuff, drink, services and insurance products in particular. Many of these prices affect the very people examined in the Vincentian Partnership study most deeply – Irish families on low incomes. Despite valiant efforts by my colleague, Deputy Rabbitte, the Tánaiste has refused to take any serious action on this problem beyond the mild admonition to the grocery multiples and licensed trade. The result is that prices which have risen dramatically this year will stay relatively stable in euros after Christmas but our social welfare recipients will bear the brunt of this aspect of the euro changeover. For this reason also the basic increases in rates detailed in sections 2 and 3 are once again disappointing. Last week the Minister was engaged in his usual rant about the era before the Celtic tiger, proudly detailing his welfare rises for 2002 of 7.4% to 9.4% as he did again tonight.

He did not tell the Dáil that he had, once again, missed one of the key targets of most of the pre-budget submissions he received. The Combat Poverty Agency, for example, urged the Minister to index social welfare payments in line with wage growth in the economy before he left office. This would mean an increase of 10.4% in weekly welfare, a basic rise of £14, or 17.80. The Minister for Social, Community and Family Affairs hopelessly missed this target and has made the task of his successors in reaching the level of welfare income recommended by the benchmarking group more difficult.

The Combat Poverty Agency noted that the vast bulk of additional resources over indexation in the past three budgets was allocated to tax reductions, rather than to improvements in the income of the poorest sections of society. The agency concluded that the richest 30% received more than half of all resources, while the poorest 30% received less than 10%. It is for this reason that the agency believes that the Government's widening of income inequalities threatens to undermine the objectives of the national anti-poverty strategy. The first lengthy critique of the budget and the Social Welfare (No. 2) Bill, 2001, comes from the justice commission of CORI, in a submission called Five in a row: Prosperity Without Fairness.

Not again.

CORI's comments on the Government's treatment of citizens on low—

I have heard it before.

I want to read this into the record.

There is no originality in the Opposition.

—and social welfare incomes is a devastating indictment of the Ministers for Finance and Social, Community and Family Affairs. The submission says that "as a direct result of the choices contained in Budget 2002, the number of people living in relative income poverty will continue to rise, the rich/poor gap will continue to widen, many people in low-paid jobs will gain nothing, families on very low incomes will not have a right to a medical card and large numbers of people will continue to wait for appropriate accommodation".

CORI pointed out that Ireland spends a lower proportion of GNP, 17.5%, on social inclusion than any other European Union country. The Irish provision is way below the European average of 28.2% of GNP. CORI continues:

There are more people living in relative income poverty, with less than £109 per week per adult equivalent, today than there were ten years ago. While the depth of some people's poverty has been reduced in recent years it has been done at the expense of the less poor rather than the well off.

The Minister read some recent Central Statistics Office figures today, which show that the income gap in society has steadily widened under his administration.

Nowhere in the Social Welfare (No. 2) Bill 2001, is the Government's heartless attitude to pensioners and citizens on lower income more evident than in section 7. As the Minister for Finance desperately ransacked the national financial institutions to somehow balance his budget against the ideological and phoney parameters he set himself in 1997, his eyes greedily fell on the surplus in the social insurance fund. The raiding of 635 million from the fund means that the net real increase in social welfare this year is a paltry 444 million, or £300 million.

The Deputy should ask the people if the increases are large enough.

This is the fundamental reason why the Minister, Deputy McCreevy, would not permit an acceptance—

I am surprised that Deputy Broughan opposes the redistribution of funds to those who are less well off.

Deputy Broughan should be allowed to conclude without interruption.

—of the benchmarking report in 2002.

I am surprised at the Deputy.

Since the social insurance fund was established in 1953, no Minister for Finance has adopted such a cavalier attitude to the insurance fund of the workers and employers. My colleague, Deputy McDowell, rightly described the attitude as illegal last Wednesday. We are expected to retrospectively approve the Minister, Deputy McCreevy's assault on the fund in the remarkable and insufficient section 7(12). It remains to be seen if other elements of Deputy McCreevy's creative accounting, such as the taking of 610 million from the Central Bank and the transfer of 500 million from the capital services redemption account, will be approved by this House. The Labour Party continues to strongly oppose the Minister for Finance's attack on the social insurance fund and the complicity of the Minister for Social, Community and Family Affairs. For this and other serious reasons, my party opposes this Bill on Second Stage and will attempt to seriously amend it on Committee Stage.

The Minister, Deputy Dermot Ahern, is charged, under the Social Welfare (Insurance) Act, 1952, and section 122 of the Social Welfare (Consolidation) Act, 1981, with the management and control of the current account of the social insurance fund and the Minister for Finance is charged with managing the fund's investment account. Sums payable from the fund are paid from the current account of the fund, as amended by section 16 of the Social Welfare Act, 1998. I note that money standing to the credit of the current account of the fund and not required to meet current expenditure must, according to legislation, be transferred to the investment account of the fund. Perhaps the Minister who has clear responsibility to this House for the current account of the fund, will clarify how he discharged his responsibilities with regard to the clear purposes for which the fund was established and is maintained with regard to the current draw-down for general revenue purposes.

I find no legal basis or precedent in existing legislation for the actions of the Government. I believe, therefore, that the two-line formula for a once-off payment from the social insurance fund is open to serious question and has to be resisted. The decision to raid the social insurance fund bears all the hallmarks of the Attorney General, who wanted to abolish the fund when he was a Member of this House. My colleagues have mentioned that one of the Minister's clear mistakes in the past five years was his failure to give a modern legislative basis to the fund, despite the promise to do so in the Fianna Fáil manifesto, of which I have a framed copy. The Minister has failed to meet his basic aim of creating a board of management for the fund.

The Deputy should quote the promises we made about old age pensioners.

It is there in black and white.

We promised to increase the old age pension to £100 and it is now £116.

Fianna Fáil did not deliver.

Deputy Broughan should be allowed to continue.

Deputy Broughan is being selective in his references, but I have outlined the facts.

When it became apparent that the Minister for Finance was acting ultra vires by attacking the social insurance fund, the response of the labour movement was most cogently expressed by the general secretary of the Irish Congress of Trade Unions, Mr. David Begg, who reminded television viewers of the reasons why the fund was established and supported by workers and employers more than 50 years. The fund has provided a range of basic benefits which are covered by section 2 of the Bill and for which workers have paid through social insurance contributions. Although the fund operates effectively as a “pay as you go” system, benefit payments from it are often regarded, rightly, as a form of deferred salary. In this sense, the fund operates as a hypothecated tax on wages and salaries, which is why the Minister should not do what he is proposing to do. The fund exists to extend and develop the range of benefits paid for by workers and their families through worker protection and redundancy legislation. By diverting 635 million—

I challenge the Deputy to say where he would find the £850 million we need.

As I have said before, I would have no problem finding the money. I do not agree with the pace with which the Government is reducing corporation tax.

The Deputy would increase tax.

The Minister knows that we could easily have collected £800 million in the past two years with a 20% rate, which I would accept. If there is a 20% rate for workers, why should there not be a 20% rate for companies?

I ask the Deputy to address his remarks though the Chair.

I will address my remarks through the Chair.

I have had to ask the Minister not to respond to interruptions and I suggest that Deputy Broughan should not respond to interruptions from the Minister.

(Carlow-Kilkenny): The Minister has been very bold tonight. He has not stopped interrupting.

I have had my Weetabix.

(Carlow-Kilkenny): The Minister should stop eating those things.

As Mr. Begg noted last week, the anticipated social insurance fund surplus of 1.835 billion in 2002 offered a unique opportunity to enhance existing benefits and to introduce new ones. For several years, the Labour Party and the Irish Congress of Trade Unions have advocated the introduction of a PRSI-funded parental leave benefit. The Minister refused the ideal opportunity offered by Budget 2002 to introduce such an improvement for workers and their families. The inception of a parental leave benefit of four or five weeks was easily within the scope of a buoyant social insurance fund, but the Minister was not interested.

Similarly, the opportunity existed for an innovative improvement to the home maker's scheme, which commenced during the partnership Government in April 1994. The scheme seeks to make it easier for a home maker to qualify for an old age contributory pension at the age of 66. This was the Minister's last opportunity to extend the rights of all qualifying home makers, prior to 1994, but he spurned the chance to do something for older women. While increases in various pensions are welcome, the Minister might have significantly increased carer's benefit. An extension of the 65-week period, for example, or an enhanced improvement in the payment, might have proven more attractive for many carers who struggle with full-time jobs and demanding care duties.

Another disappointment with this Bill arises in section 3, which heartlessly deals with the carers of Ireland. On budget night, the Labour Party received a stream of irate telephone calls and faxes from carers and their representatives, one of which came from the highly respected Carers Association, whose fax indicated that the group was disappointed by the budget. The association believes that the Government has failed to recognise the needs of thousands of carers who provide 24-hour care for frail and disabled people. The director of the body, Mr. Eddie Collins-Hughes, concluded that last Wednesday was a disappointing day for carers. Carers and their representatives were desperately taken aback by the miserable increase in the income disregards for carer's allowance. The disregards of £25.42 – 32.28 – for a single person and £50.85 – 64.57 – for a married couple will only bring the disregards to £150 – 191 – and £300 – 382 – from April 2002.

The Minister will recall that, eight or nine months ago, the Taoiseach sent a message to a large meeting of carers of Limerick through the famous Limerick Minister of State, Deputy O'Dea, which promised that the disregard for a couple would reach the average industrial wage. However, at the end of the year, and after the budget, this has not happened. This year only 3,400 additional carers will benefit from the new disregards. The Minister and the Government will leave office with the majority of full-time carers receiving no allowance at all, a fact highlighted by the figures in the review of carer's allowance by the Department of Social, Community and Family Affairs. The Minister also cited CSO figures to this effect.

The increase in the respite grant to £500 is welcome, but throughout the 28th Dáil the Labour Party has advocated a target of £1,000 per carer.

There are a lot of welcomes in the Deputy's speech.

The small increase in the respite grant has not been accompanied in this Bill or in the new health strategy by the development of a nation-wide system of community care and guaranteed respite time for carers. More than ever the Labour Party is determined to transform the lives of carers. Deputy Quinn pledged at our national conference in Cork last September that any future participation by the Labour Party in Government will abolish the means test for the carer's allowance and transform it into a properly recognised carer's payment. We are determined to allocate a portion of that payment to full-time carers already accessing other social welfare benefits. In Government the Labour Party will introduce a cost of disability payment and a nation-wide, enhanced network of community care and respite supports.

The Deputy would probably take the money from the pension fund.

The Minister had the resources to do so, particularly over the past three years. He and his colleagues have failed and it is time for others in this House to be given a chance in the 29th Dáil to enter Government with a comprehensive programme to finally bring justice to the most deserving and large body of our citizens, our carers.

The Labour Party had its chance, but it did nothing.

The third essential reason the Labour Party is opposing the Social Welfare (No. 2) Bill is its defiant failure to accept the final report of the Social Welfare Benchmarking and Indexation Group established under the Programme for Prosperity and Fairness. The trade union, community and voluntary pillars rightly advocated a preferred target of increasing the lowest social welfare rates to 27% of gross average industrial earnings in the short-term by 2003, and to 30% by the budget of 2006. The final report considered the target of 27% of gross average industrial earnings a reasonable policy objective and that it should be met in full no later than the budget announced in late 2006. This majority view did not rule out setting a higher target, such as 30% of the gross average industrial wage, the same target announced by the Labour Party. However, unfortunately the Committee on Family, Community and Social Affairs has heard that the Departments of Finance and Enterprise, Trade and Employment refuse to accept these basic targets. Despite the Minister's irresponsibility in allowing the Minister for Finance, Deputy McCreevy, to raid the social insurance fund, Deputy McCreevy has resolutely refused to implement the first step to even modestly decent social welfare incomes. Despite an almost unanimous raft of submissions from groups which work with the poor that basic welfare rates should increase this year by £14 a week to a minimum of £98, the response from this Government has been a miserly £8.06. The rates of long-term unemployment, one-parent family payment, blind pension, PRETA and disability allowance have only increased to £93.56 – 118.80 – a week.

At the crest of the Celtic tiger and before we hopefully avoid a full-scale and lengthy recession, this farewell allocation for long-term recipients is a slap in the face to the most vulnerable of citizens. Before last Wednesday I argued strongly for a basic welfare rate of £100 per week – 127. Such an increase would have given a good platform for the next Government to pursue the Labour Party's and the benchmarking group's target of 30% of gross average industrial earnings.

I acknowledge and welcome the amalgamation of supplementary welfare allowance, short-term unemployment assistance and long-term unemployment assistance into one higher rate which is also a change I advocated at the Labour Party's last national conference. However, even the increases in social insurance benefits in section 2 of the Bill are disappointing, with widow's and invalidity pensions going up by only £8 and disability and unemployment benefit only increasing by £8.06. Once again the Minister was constrained in improving social insurance benefits because he had needlessly given away a third of his projected social insurance fund surplus. As I have mentioned, this is also the reason he was fearful to develop new social insurance benefits or to improve existing ones.

Most of the advocacy bodies for the large section of our society on very low incomes argued for the agreed 70% rate for qualified adult allowances to be front-loaded to 2002. However, the Minister seems to have lost the argument in Cabinet and Deputy McCreevy granted a paltry £8.06 in the assistance rates and £9.31 in the benefit rates. This society expects an adult citizen to live on an incredibly low £62.06 for almost all assistance QAAs on social assistance and the same rate for adult dependants of those on disability and unemployment benefit.

This is the tenth budget I have witnessed in this House and every year I have had to refer to the disgracefully low levels of income on which this conservative-dominated House expects citizens to live. I also said this during the rainbow Government of which the Labour Party was a member. Is it any wonder that many of us on the left of Irish politics long for the day when there will be a majority left party in this House to truly represent the most vulnerable in society and to insist on a decent basic income?

This year the Government reached its much vaunted target of £100 a week for non-contributory old age pensions and I welcome that achievement for which I commend the Minister. However, the £105.53 – 134 – is well below the 34% of gross average industrial earnings advocated by the trade union seniors' representative body and the seniors' parliament. For this reason the Labour Party and its spokesperson, Deputy McDowell, last year proposed a contributory pension £120 and £126 – 160 – for contributory pensioners this year.

All sides of this House accept the need to allocate decent pensions to the citizens who created the framework for the recent massive growth in our economy and to ensure that these citizens receive their well deserved share of our new wealth. However, this Government has ada mantly refused to address other serious quality of life issues for senior citizens, such as their security or care needs. It is estimated that about 40% of people will have long-term caring needs at some point when they get older, but this outgoing Government has paid little heed to them.

Thanks to our trade union, voluntary and community sector colleagues through the PPF we have had the second stage of the major development in child benefit this year and the £25 and £30 increases are welcome. I give the Government credit for this increase. However, it is disappointing that child benefit improvements are not included in this Bill and that parents must wait until next April and May to receive these increases. Improvements in child benefit do not create a much needed national child care system which is an important area which the Minister and his colleague, the Minister for Education and Science, Deputy Woods, is leaving to the next Government.

Deputy McCreevy boasts of his introduction of the tax credit system, but he did nothing to utilise the system in the past two budgets to assist poorer working families by, for example, introducing an earned income refundable tax credit. Many community bodies, particularly the St. Vincent de Paul, have queried the Government's refusal to improve child dependent allowances as a targeted child income measure. Since the rainbow Government, when Deputy De Rossa was Minister, the child dependent allowance rate has not been increased from the basic £13.20. This lack of an increase in five years of an important social welfare allowance may well be a fitting epitaph for this Government. That is the reason the Labour Party supported the proposal of the Combat Poverty Agency to increase the lowest CDAs to £15.20 per week in a two-year strategy.

Concern has also been expressed about the future of the free schemes since the Minister gave the impression earlier this year that they were being merged into a single household benefit. I received telephone calls from people who thought the schemes were being abolished and replaced by a small cash payment. This was the Minister's original intention, but I am glad he has abandoned it as this benefit in kind is a key part of most pensioners' budgets and those of carers and those on invalidity benefit.

The proposal to streamline the conditions and applications for electricity, gas and telephone allowances from May 2002 is welcome, as is the extension of the free travel companion pass to persons receiving invalidity pensions. I also welcome the increased number of units for electricity and gas allowance. The weekly income threshold for family income supplement has been altered by a disappointing amount. I hope the Minister will look again at this provision on Committee Stage. The fuel allowance has been increased by £2.09 to £7.09 – 9 – from January 2002. This is the first increase in this allowance since my colleague, Mr. Barry Desmond, was Minister for Social Welfare in 1984. Given the recent UCD research which showed that up to 2,000 older Irish people die as a result of fuel poverty each year, this very belated and small increase in the fuel allowance is also welcome. Much more needs to be done by the Minister for Social, Community and Family Affairs and by the Minister for the Environment and Local Government to ensure that the terrible toll of senior citizens as a result of fuel poverty is brought to an end.

I welcome Annexe C, a poverty proofing exercise which we were shown last Wednesday. However, the two and a half pages of poverty proofing amount to a derisory and cursory exercise. It made little reference to the real impact of social welfare payments or the fact that the minimum wage is still liable to tax and it did not refer to the impact of the increase of 1% in VAT or the increase in excise duty on petrol and diesel, which will have an impact on poorer families, particularly in rural areas. For that reason, we need a more thorough poverty proofing exercise. In the coming weeks I hope we see more information from the Department of Social, Community and Family Affairs on this area. The Government is still not committed to real poverty proofing of its achievements.

The Government has done very little work in the area of spatial inequality and I have heard much criticism of the Government's failure to make any change in direct provision for asylum seekers. After five budgets which were skewed in favour of the rich, the Minister for Social, Community and Family Affairs has failed to arrest the growing divisions in our country based on income. This budget was somewhat better than its four predecessors but the Social Welfare Bill still fails to deliver the key social advances long desired by society. I oppose the Bill on the three grounds I have outlined: the Bill rejects the report of the social welfare benchmarking and indexation group; it has betrayed the carers of Ireland and has not given the fundamental advances they were expecting; and it discloses an amazing, shoddy and unjust attack on the social insurance fund, setting a bad precedent. For these reasons, the Bill should not be read a Second Time.

I wish to share my time with Deputy Ardagh and Deputy Ellis.

I am sure the House is glad we are discussing the Social Welfare Bill before Christmas. This is the first time the House has had an opportunity to discuss such important legislation at this time of year to enable the payment dates of social welfare benefits to be brought forward to the beginning of January.

I compliment the Minister and the Government on the innovative and positive measures contained in the budget and in the Social Welfare Bill. It is particularly important that payment dates are being brought forward to 1 January. This marks a huge improvement on what existed in 1997 when social welfare increases were only applicable for 29 weeks of the year. The majority of payments and increases will now be applicable for 52 weeks of the year.

(Carlow-Kilkenny): The Deputy should explain that statement.

A person who received a pension increase in 1997 did not get the increase for 52 weeks.

(Carlow-Kilkenny): From June to June is 12 months.

Deputy Browne, you will have an opportunity to speak tomorrow morning.

(Carlow-Kilkenny): My patience will not hold out that long.

I am sure Deputy Browne is frustrated because of the very innovative measures contained in this Bill. I am sure Deputy Browne and Deputy Broughan would like to write out of history the appalling records in the social welfare area of the president of the Labour Party, Deputy De Rossa, his Minister of State, Deputy Durkan, and the leader of the Labour Party, Deputy Quinn, during their tenures in office between 1994 and 1997.

That is ancient history.

(Carlow-Kilkenny): Where was Deputy Smith when Brian Boru was killed?

Deputy Broughan is anxious to get away. I did not realise Deputies Quinn, De Rossa or Durkan lived in Brian Boru's time. Maybe they live with the ideas of that era.

(Carlow-Kilkenny): That is rubbish.

What is hurting the Fine Gael Party and the Labour Party so much is that the Government has increased social welfare spending from £4,500 million in 1997 to £7,400 million in 2002. Deputy McGrath spoke earlier about election promises.

(Carlow-Kilkenny): Did he misquote the Deputy?

I remind the Fine Gael Party of the promise we made before the 1997 election. The Fianna Fáil Party promised that the old age contributory pension would rise to £100 by 2002. I believe Deputy Browne is voting against the Bill. If he does so, he will vote against the increases in the old age contributory pension to £116 per week and the non-contributory pension to £105 per week. That is the social philosophy of the Fine Gael Party.

(Carlow-Kilkenny): This time next year we will see what can be done.

The Labour Party in Opposition makes worthwhile promises, but when it gets an opportunity to implement them, it fails miserably.

Opposition speakers mentioned the social insurance fund, but they avoided mentioning the national pensions reserve fund. At the end of this year, that fund, which was recently established by the Government, will contain 7,7000 million and the projected income for the fund for 2002 is 1,035 million. What is being transferred from the social welfare fund is less than half the projected income of the pensions reserve fund. The Fine Gael Party and the Labour Party should check their facts before making ill-informed and outrageous comments.

The Government has increased contributory pensions by almost 50%. Child benefit has been increased by over £60 per month per child for the first two children, compared to only £10 under Deputy De Rossa, Deputy Quinn and the other members of the Fine Gael Party, the Labour Party and Democratic Left.

(Carlow-Kilkenny): How many years were they in Government?

The social inclusion measures contained in the Rainbow Government's final budget amounted to £273 million. The social inclusion measures in the 2002 budget amount to £1,018 million. That highlights the huge advances which have, rightly, been made for people who are dependent on social welfare payments.

Speakers from Deputy Browne's party mentioned meeting people over the weekend. The people I spoke to over the weekend throughout my own county of Cavan were particularly pleased with the social welfare improvements and with the efforts of the Government to give a proper income to people, particularly elderly people.

Debate adjourned.